:iubs~The  Drama. 


L  A  Times     Jan  10   1922 


-.Kc- 


\ 


a,    »h*    Federal    ^^^•"•''— ;t2«{~??t  iS 
By    *h«    City    Directory— (lMl>—11t.MI 


TH 
OF 


TWO  HELD 
T    FOR  DEALS 
IN  STOCKS. 


R< 


ROBERT  M.  PBA 

ATTORNEY  AT  L  "  ' 
701  UNION  OIL  B 


Melville  FrcAser  Accused 
of  Using  Ore  from  Rich 
Mine  to  Increase  Sales. 


Accused  of  selling  about  $1,300,- 
000  worth  of  stock  In  the  Jerome- 
Superior  Copper  Company   of  Ari- 
zona, upon  the  representation  that 
the    core    of    a    drill    containing    a 
high      percentage    of      copper   had 
come    from      that    mine.      Melvlll* 
Fralser,    well-known    Los    Angeles 
attorney,    president    of      the    com- 
pany,  and  George  Mitchell,  mana- 
ger  and    chief    engineer,    were    ar- 
rested yesterday  by  Deputy  Sheriff 
Fox    on    grand    Jury    indictment*. 
They  are  accused  of  conspiracy  to 
defraud.  _.        „      .^ 

The  two  appeared  before  Presid- 
ing Judge  Willis,  who  released 
them  on  ball  of  $5000  each,  for 
appearance  in  court  for  arraign- 
ment. According  to  Dep.  Dist.- 
Atty.  Stafford,  who  handled  the 
cases  before  the  grand  jury.  It  is 
charged  that  the  two  and  others 
asserted  that  the  United-Verde,  one 
of  the  richest  copper*,  mines  in 
■  the  country,  drilled  into  the  prop- 
erty of  the  Jerome-Superior  Cop- 
per Company  mine,  and  obtained 
therefrom  th«  valuable  copper 
drill  core. 

On  these-  representations,  It  u 
charged  a  large  amount  of  stoo'4 
was  sold  In  California.  It  is  as- 
serted in  the  indictment  that  the 
sample  ore  did  not  come  from  the 
Jerome-Superior  property. 

T.  B.  Connor  was  also  arrested 
and  lodged  for  a  time  in  the  County 
Jail  on  a  grand  jury  Indictment 
charging  conspiracy  to  defraud.  He 
was  later  released  on  bail  until 
arraignment. 


^ 


rURDAY    MORNING 


icffiocksTl^rens' "' 
Law,  Realtors  Claims 


rorrpn.*!  land  title  ri'f.':.<-t ration 
sn  .<?oiTiPwhat  »':'iA."f iila(p<l,  ir 
,  liy  a  Tf^eent  d'^oision  of  tho 
me  rourt  of  Oalifornia,  i.s 
on  of  r)roniin'>nl  title  men  of 
ccordinK  to  a  .lew.s  l)t'll«-tin 
\\f  new.s  departmo;it  of  the 
e-nl  iO.state  .X.s.sociation. 
iro.se  in  Los  An^ele.s  Comity 
niKht  hy  C.  .•"ollette  apninst 
ghl  and  Power  Coiporatiori. 
lined  a  Torrens  cfitificate 
i.sed  the  property.  Ihe  (.-ei- 
not  show  the  rif^ht  of  way 
jower  company,  lie  paid  the 
r  the  property  -nd  did  not 
he  power  ronipu'iy  cli.imed 
n  it. 

n»'  Court  reversed  the  Di.s- 
f  .\ppeal  and  h-  .d,  after  an 
xaniination  of  the  'j'on-en.s 
the  Ton-en.s  i-ortifioate  held 
a.s  void  and  of  no  value  as 
iKhts  of  the  power  company, 
paraf^raph   of  the  decision 


.sions  of  the  land  frle  law 
ort.s  to  entitle  tlie  pnr- 
a  ret-'istered  title  lo  the 
the  aetiial  poHse.ssion  and 
of  another  lo  hold  the 
or  to  the  i)rior  riKht-s  and 
iieh  po.«;.se.s.sor  .  .  .  are 
lo  the  provi.sion  of  the 
.St  it  lit  ion,  which  provides 
s  shr. II  not  l)e  deprived 
)erty  without   due  proce.ss 

tell,' attorney  for  the  Slate 
Company,  filed  a  very  ex- 
in  I  he  .Supreme  Court  iwk- 
I'orren."*  cert  ifi<-ates  be  up- 
reme  Court  dLsa^reed  with 
red   by    Hell   and    held    thai 


•  lui  n  iii,oin,.....tK  Iby  fact  that  Follelte 
relied  upon  the  Torrens  certificate  in 
t'ood  faith,  it  was  void,  and  Rave  him  no 
right  to  the  properly  us  apain.st  the  title 
of  the  power  company.  .San  Francisco 
llecorder. 


TUC   I 


AWYFRS' BRIEF  CASE 


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C>^''*^t-^'^-^<''?-»^— *-<4     tif-CjlL.     o»'y^ti^ 


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LAND  TITLE  ACT  AT  STAKE 

— / .  /^ ..   — — 

Legality  of  T  on  ens  Law  ^  May    be    Determined    at 
Hearing  Just  Opened  in  Federal  Court 

A  hearing  thai  will  go  far  toward  determining  the  legality  of 
the  Torrens  Land  Title  Act  in  California  is  now  In  progress  before 
United  States  District  Judge   Bledsoe. 


3I»t 


^'■'^■^ 


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The  title  of  the  smc  Is  the  Fran- 
cis Investiiient  Company,  a  Utah 
corporation.  against  Friend  J. 
Austin,  H.  T.  Davis,  Jasper  Thorn - 
ason,  T.  E.  Gill  and  others.  Gill  is 
the  only  defendant  at  the  hearing, 
as  the  others,  it  is  said.  ha\-e  re- 
moved from  Imperial  Valley  and 
cannot  be  located.  The  land  con- 
sists of  160  acres,  and  it  is  alleged 
Gill  paid  $3  7,000  for  the  property 
in    the   vicinity    of   Calipatria. 

TRUST  DEliD  IXVOIA'tD 

It  is  charged  that  the  plaintiff 
corporation  had  a  trust  deed  on 
the  land  to  secure  the  payment  of 
$55,000,  given  by  Austin,  the  orig- 
inal owner,  and  of  whom  Gill  made 
the  purchase.  In  October,  1917, 
Austin,  through  his  attorney.  H.  T. 
Davis,  also  a  defendant,  brought 
proceedings  to  register  the  land 
under  the  Torrens  L>and  Act  free 
of  the  trust  deed. 

It  is  declared  by  the  plaintiff 
that  a  false  affidavit  of  service  in 
Ihe  action  was  in  evidence,  and 
that  the  name  of  Francis  Invest- 
ment Company,  holder  of  the  trust 
deed,     had     been     omitted.        It    is 


The  questions  to  be  determined 
are  whether  the  fact  that  a  title 
has  been  registered  under  the  Tor- 
rens law  is  final  as  to  ownership; 
whether  the  purchaser  of  real  es- 
tate has  been  duly  registered  un- 
der the' Torrens  title  law  can  de- 
pend on  that  decree  alone,  or 
whether  it  is  the  duty  of  the  pur- 
chaser for  his  own  safety  to  ex- 
amine court  records  and  proceed- 
ings in  the  matter. 

Another  point  is  whether  a  per- 
son must  exercise  reasonable  dili- 
gence when  securing  a  title  under 
the  Torrens  law,  or  Avhether  it  is 
final  as  to  ownership  no  matter 
how  secured.  If  the  court  holds 
for  the  plaintiff  corporation,  and 
the  judgment  is  affirmed  by  the 
Circuit  Court  of  Appeal,  it  will 
mean  that  the  Torrens  Land  Act 
is  useless  as  a  final  arbiter  of  title, 
and  that  e\  en  under  that  enact- 
ment, it  will  be  necessary  to  look 
into  the  records  to  see  that  the 
property  is  clear  of  all  incum- 
brances— a  task  that  is  done  by 
title-  companies  that  Torrens  Land 
Act  was  supposed  to  supplant..  Aus- 
tin   declares   he    is    to    be   an  "inno- 


^ 


^. 


sought  to  foreclose  the  trust  deed,    cent  purchaser   of  the  property. 


THE  LIBRARY 
OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 
GIFT  OF 

Robert  M.   Pease 


ROBERT  M. PEASE 

ATTORNEY  AT  LAW 
701  UNION  OiL  ^     '  •" 

LOB      '  '  • 


RNIA.  SATURDAY    MORNIN< 


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Court  EdicffiocksT^rens" "" 
Land  Law,  Realtors  Claims 


Thnt  the  Torrens  land  (itle  iiKiftration 
hiw  h;is  hot-'n  somewhsit  *'?'ia3(»i|I;iIo<1,  if 
not  nullified,  l>y  a  recent  decision  ol"  the 
Slate  SiiF>reme  Court  of  ralifornia,  is 
the  declaration  of  i)roniinent  title  men  of 
California,  accoidiuK  to  a  .lews  ht'lU-tin 
is.sued  by  thp  news  depart nio:it  of  the 
California   Heal    Instate  As.sociation. 

The  case  arose  in  I^os  Anfj^eles  Contily 
and  was  hroiiKht  l)y  C  .''ollette  afc.'iinst 
the  Pacific  Lisht  and  Powc^r  Coiporatioti. 
Follette  obtained  a  Torrens  certificate 
wlien  purchased  the  property.  The  cer- 
tificate did  not  show  the  rif;:ht  of  wa.v 
held  liy  the  power  company,  lie  r'aid  the 
full  value  for  the  property  ••nd  did  not 
know  that  the  power  copipa'iy  chiimed 
;my  interest   in  it. 

The  .''upieme  Court  reversed  the  Dis- 
trict Court  of  .Vf)peal  and  h'>d,  after  an 
exhau.stive  examination  of  the  Torren.s 
.^^talute  that  the  Torrens  certificate  held 
by  I'^ollette  was  void  Jind  of  no  v-alue  as 
ajralnsi  the  rights  of  the  power  company. 
In  tbt»  clo.sinK  paraj^-raph  of  the  decision 
the   court    says: 

The  provisions  of  (he  land  frle  l;iw 
which  purports  to  entitU;  t!ie  pur- 
chaser of  .-I  registered  title  lo  the 
premi.se.s  in  the  acttial  pos.session  and 
occupancy  of  another  lo  hold  the 
same  suf.erior  lo  the  prior  ri^hls  and 
interests  of  su<'h  posse.s.sor  .  .  .  are 
obnoxious  to  the  |)rovision  of  the 
I'^ederal  T'onsl  it  iitioii,  vvhich  provides 
that  ixirsons  shr.ll  not  be  deprived 
of  I  heir  properly  wilhoiil  due  process 
of    law. 

.lanit's  W.  IJell,  attorney  for  the  Slate 
Torrens  Title  Company,  filed  a  very  ex- 
haustive brief  in  the  .Supreme  Court  urn- 
iiiK  thai  the  Torrens  cert  iflcM  tes  be  up- 
held. The  Supreme  Court  dis;inreed  with 
the  poinl.s  u tired  by  Hell  and  luld  that, 
not  wilhslnnditiK  Itav  fact  that  I-'ollette 
relied  u[>on  the  Torrens  certificate  in 
(.rood  faith,  it  was  void,  and  nave  him  no 
rif?hl  lo  the  propi'riy  tis  a^rainst  the  title 
of  the  power  comimny.  .San  Krancisco 
Uecordcr. 


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TUC  I 


AWYPRS' BRIEF  CASE 


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LAND  TITLE  ACT  AT  STAKE 


7T7^ 


Legality  of  Torrens  LaW^May    be    Determined    at 
Hearing  Just  Opened  in  Federal  Court 


A  hearing  that  will  go 
the  Torrens  Land  Title  Act 
United  States  District  Judge  Bledsoe 

The  title  ot  the  suit  Is  the  Fran- 
cis Invest^nent  Company,  a  Utah 
corporation.  against  Friend  J. 
:  Austin.  H.  T.  Davi.«,  Jasper  Thoni- 
It  ason,  T.  E.  Gill  and  others.  Gill  is 
the  only  defendant  at  the  hearing, 
as  the  others,  it  is  said,  lia\'e  re- 
moved from  Imperial  Valley  and 
cannot  he  located.  The  land  con- 
sists of  160  acres,  and  it  is  alleged 
Gill  paid  $37,000  for  the  property 
in    the   vicinity    of    Calipatria. 

TRUST  DEED  INVOLVIiD 

It  is  chai-ged  that  the  plaintiff 
corporation  had  a  trust  deed  on 
the  land  to  secure  the  payment  of 
$55,000,  given  by  Austin,  the  orig- 
inal owner,  and  of  whom  Gill  made 
the  purchase.  In  Octobei-.  1917. 
Austin,  through  his  attorney.  H.  T. 
Davis,  also  a  defendant,  brought 
proceedings  to  register  the  land 
under  the  TSrrens  Land  Act  free 
of  the  trust  deed. 

It  is  declared  by  the  plaintiff 
that  a  false  aifidavit  of  service  in 
The  action  was  in  evidence,  and 
that  the  name  of  Francis  Invest- 
ment Company,  holder  of  the  trust 
deed,  had  been  omitted.  It  is 
sought  to  foreclose  the  trust  deed. 


far    toward    determining 
in    California    is    now    In 


The 


the    legality    of 
progress    before 


questions  to  be  determined 
are  whether  the  fact  that  a  title 
has  been  registered  under  the  Tor- 
rens law  is  final  as  to  ownership; 
whether  the  purchaser  of  real  es- 
tate has  been  duly  registered  un- 
der the' Torrens  title  law  can  de- 
pend on  that  decree  alone,  or 
whether  it  is  the  duty  of  the 
chaser  for  his  own  safety 
amine  court  records  and 
Ings  in  the  matter. 


pur- 
to    ex- 
proceed- 


Another  point  is  whether  a  per- 
son must  exercise  reasonable  dili- 
gence when  securing  a  title  under 
the  Torrens  law,  or  whether  it  is 
final  as  to  ownership  no  inatter 
how  secured.  If  the  court  holds 
foi'  the  plaintiff  corporation,  and 
the  judgment  is  affirmed  by  the 
Circuit  Court  of  Appeal,  it  will 
mean  that  the  Torrens  Land  Act 
is  useless  as  a  final  arbiter  of  title, 
and  that  even  under  that  enact- 
ment, it  will  be  necessary  to  look 
into  the  records  to  see  that  the 
property  is  clear  of  all  incum- 
brances— a  tcisk  that  is  done  by 
title  companies  that  Torrens  Land 
Act  was  supposed  to  supplant..  Aus- 
tin declares  he  is  to  be  an  "inno- 
cent  purchaser   of  the  property. 


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REALTY  LAWS  OF 


<2. 


CALIFORNIA        ^^.   "^^. 

TALKS  BY  '^    ^c-^ 

MELVILLE  P.  FRASIER 

MEMBER  LOS  ANGELES  BAR 
COUNSEL  FOR  TITLE  INSURANCE  COMPANY 

LOS  ANGELES,  CALIF. 


PRICE  ^5.00 


SAMUEL  M.  CHORD 

547  TITLE  INSURANCE  BUILDING 

LOS  ANGELES,  CALIF. 


I 

nil' 

Copyright  igi6  by 

Mel'ville  P.  Frasier 

Los  Angeles 


ijr 


COMMERCIAL  PRINTING  HOUSE 
LOS  ANGELES 


FOREWORD 


This  work  is  not  intended  as  a  text  book  for  lawyers,  nor  as  a 
lawyer's  book  of  reference.  The  writer  has  not  sought  to  analyze 
the  statutes  and  decisions  as  an  aid  to  the  practitioner.  Rather  has 
he  sought  to  set  forth  in  as  clear  a  form  as  he  might  the  elemental 
rules  of  law  governing  transactions  in  real  property. 

These  talks  are  directed  primarily  to  the  one  who  contemplates 
entering  into  such  transactions  and  are  in  the  main  in  the  nature  of 
precautions  to  be  observed. 

In  his  thirty  years'  experience  in  the  title  business,  the  writer 
has  seen  so  many  instances  of  loss  of  money  and  rights  through  ig- 
norance of  these  elemental  rules  that  he  deems  it  not  unwise  to  give 
to  the  public  the  benefit  of  his  research  and  observation. 

He  distinctly  wishes  it  understood  that  this  book  does  not  pur- 
port to  contain  the  law,  but  merely  his  comments  on  the  law  as  he 
finds  it,  and  his  suggestions  as  to  safeguards  to  be  observed  by  his 
readers. 

MELVILLE  P.  FRASIER. 

Los  Angeles,  Cal.,  June,  1916. 


INDEX 


1.  Nature  of  Estates  in  Land  in  California 7 

2.  Essentials  of  a  Deed  17 

3.  Covenants,  Conditions  and  Restrictions  in  Deeds 31 

4.  Descriptions   of   Lands 52 

5.  Mortgages  and  Trust  Deeds  69 

6.  Homestead   Exemptions   90 

7.  Landlord  and  Tenant   104 

8.  Contracts  of  Sale — Options — Escrows 117 

9.  ^Mechanics'   Liens   135 

10.  Trusts  and  Agency  144 

11.  Wills  and  Law  of  Succession 158 


I. 

History  and  Nature  of  Estates  in  Land 

in  California 

The  territory  now  embraced  within  the  lines  of  the  State  of 
California  once  belonged  to  Spain.     Whatever  law  governing  the 
ownership  and  transfer  of  property  which  may  have  been  applied 
during  the  period  of  her  sovereignty  was  the  ancient  Civil  Law, 
derived  almost  in  its  entirety  from  the  Roman  Laws.     Under  this 
ancient  Spanish  law  all  real  estate  was  deemed  to  be  owned  by  the 
king.    No  individual  could  own  what  is  termed  in  the  common  law 
of  England  a  fee  simple,  that  is  to  say,  an  absolute  ownership  of  and 
dominion  over  the  land  itself.    The  king  granted  out  to  his  subjects 
the  use  of  lands  on  consideration  of  services,  courtly  favor  or  for 
a  lump  sum.    The  title,  however,  as  we  understand  the  term  did  not 
pass  from  the  sovereign.    When  Mexico  threw  off  the  yoke  of  Spain 
and  established  her  own  independence  the  titles  to  all  lands  became 
vested  in  the  State  as  sovereign  and  thereafter  the  State  made  such 
grants  and  concessions  as  were  formerly  made  by  the  king  of  Spain. 
The   system    of   granting  lands   in    California   from    the   sovereign 
arose  sometime  about  1780.    The  public  authorities  were  permitted 
to  grant  out  to  individuals  tracts  of  land  to  be  used  for  stock  raising 
in  areas  not  to  exceed  three  leagues,  or  nine  miles  square,  provided 
the  same  did  not  interfere  with  the  rights  of  any  mission  or  pueblo 
already  established.     It  may  be  noted  here  that  the  grants  to  the 
several  missions  of  the  lands  surrounding  them  were  of  the  mere 
right  of  use  and  occupancy.     The  missions  were  broken  up  by  ac- 
tion of  the  Mexican  Government  between  1834  and  1840.  Practically 
all  personal  property  belonging  to  them  was  confiscated  and  their 
grants  of  lands  were  forfeited.    Allotments  were  also  made  to  citi- 
zens dwelling  in  pueblos  of  parcels  for  residence  and  for  farms  and 
gardens  outside  of  pueblos.    These  grants  were  usually  very  vague 
and  indefinite.     Evidently  it  was  considered  that  every  man  knew 
where  he  lived  and  where  his  garden  might  be,  and  it  did  not  appear 
to  be  of  any  concern  to  other  persons.     Land  was  of  little  or  no 
value  and  not  much  heed  was  given  to  questions  of  title  or  bound- 
ary.    These  matters  were   governed  almost   entirely   by   physical 
possession  and  but  few  disputes  arose  we  may  imagine,  except  as 
to  the  actual  occupancy  of  Jose  or  Pedro. 


California  was  during  all  these  years  and  up  to  the  time  of  the 
American  occupation  a  colony  of  Spain  and  later  of  Mexico  and 
was  governed  accordingl}^  It  existed  in  theory  for  the  use  and 
benefit  of  the  mother  country.  About  1830  the  practice  of  granting 
titles  by  writings  began.  But  very  few  were  given  before  that  date 
and  they  were  not  held  in  much  regard.  Gradually  it  became  the 
custom  of  the  pueblo  authorities  to  grant  such  titles  to  such  of  the 
citizens  who  desired  them  and  gradually  it  became  the  practice  of 
the  Mexican  Government  to  grant  such  titles  of  ranches.  After 
the  United  States  succeeded  to  the  sovereignty  of  Mexico  over  this 
territory  a  Land  Commission  was  created  by  Act  of  Congress 
wherein  claimants  could  advance  their  claim  of  titles  to  these  lands. 
Disputes  as  to  ownerships  and  boundaries  were  determined  and 
upon  recommendation  of  the  Commission  confirmatory  patents  were 
issued  by  the  United  States.  So  far  as  the  writer  is  informed  every 
such  grant  in  the  State  has  been  so  confirmed.  It  has  been  the 
custom  and  practice  of  the  municipalities  which  were  once  pueblos 
to  ratify  the  early  grants  of  pueblo  property  by  deed  or  ordinance. 
The  general  practice  in  this  community  is  for  the  claimant  to  em- 
plead  the  city  in  an  action  to  quiet  title.  The  city  invariably  dis- 
claims except  as  to  such  rights  as  the  public  may  have  by  reason 
of  public  ways  or  tax  claims.  It  is  safe  to  say  there  is  but  little 
land  in  this  category  within  the  boundaries  of  the  City  of  Los  An- 
geles the  title  to  which  has  not  been  confirmed  in  the  owner  by 
deed  from  the  city  or  by  decree  against  the  city.  The  troubles  and 
disputes  over  Mexican  titles  speaking  in  a  general  sense  as  to 
inception  have  been  forever  buried.  Here  and  there  may  arise 
disputes  as  to  actual  location  of  boundary  lines  or  as  to  individual 
interests  of  claimants  of  which  our  courts  have  cognizance,  but  in 
a  sense  of  confirmation  by  government  authority  the  titles  to  the 
grants  are  forever  settled.  The  United  States  succeeded  to  the 
sovereignty  over  these  lands  by  the  treaty  of  Guadalupe  Hidalgo, 
entered  into  at  the  close  of  the  Mexican  War,  and  was  the  owner 
of  all  lands  theretofore  undisposed  of  to  individuals.  We  have  seen 
that  by  patents  she  confirmed  such  grants  as  had  theretofore  been 
made  by  the  Mexican  or  Spanish  government. 

On  September  9,  1850,  California  was  admitted  to  the  Union 
and  by  virtue  of  her  sovereignty  on  that  day  became  the  absolute 
owner  of  all  lands  over  which  the  tides  of  the  sea  ebb  and  flow^  that 
is  to  say,  all  lands  between  the  line  of  ordinary  high  tide  and  ordi- 
nary low  tide,  and  all  lands  lying  under  navigable  streams  and  lakes 
without  any  grant  from  the  United  States.  This  ownership  is  in 
the  nature  of  a  trust,  however,  for  the  public  uses  of  navigation 
and  fishery  and  these  lands  cannot  be  alienated  by  the  State  except 

8 


* 


it  be  subject  to  such  public  uses.  Franchises  can  be  granted  for 
use  to  individuals  and  grants  can  be  made,  but  always  there  exists 
the  inalienable  ownership  for  these  public  uses.  The  State  becomes 
a  proprietor  of  other  lands  by  purchase  or  condemnation  and  may 
hold  lands  for  public  buildings  and  the  like  and  its  ownership  is 
that  of  any  other  proprietor,  save  as  to  liens,  taxes  and  assess- 
ments, which  do  not  attach. 

By  an  Act  of  Congress,  approved  March  3,  1853,  there  was 
ceded  by  the  general  government  to  the  State  of  California,  the 
16th  and  36th  sections  in  every  township  in  aid  of  schools.  These 
are  known  as  "School  Sections".  The  title  vested  in  the  State  to 
the  particular  sections  when  upon  being  surveyed  under  the  ofificial 
system  of  the  United  States  the  surveys  were  approved  and 
plats  filed.  No  patent  was  necessary  to  convey  the  title  to  the  State, 
as  the  Act  of  Congress  was  a  grant  in  itself. 

On  September  28,  1850,  there  was  given  by  Act  of  Congress  to 
the  State,  all  of  the  swamp  and  overflowed  land  lying  within  her 
borders.  What  constituted  swamp  and  overflowed  land  could  only 
be  determined  as  the  Government  surveys  were  made.  The  act 
provided  that  surveys  of  such  lands  be  made  by  Government  Sur- 
veyors and  lists  thereof  with  approved  plats  returned  to  the  General 
Land  Office.  As  these  lists  were  approved,  patents  from  the  United 
States  to  the  State  of  California  were  issued.  The  decisions  are 
conflicting  as  to  the  necessity  for  this  patent,  but  the  Department 
holds  that  such  necessity  exists.  Therefore  if  you  are  oiifered  land 
which  has  been  sold  by  the  State  as  Swamp  and  Overflowed  land 
you  must  make  enquiry  of  the  United  States  Land  Ofifice  to  as- 
certain if  the  particular  land  has  been  patented  to  the  State. 

Other  smaller  grants  were  made  from  time  to  time  by  the 
United  States  to  the  State  for  University  purposes  and  the  like.  It 
must  be  remembered  that  none  of  these  grants  applied  to  any  lands 
lying  within  the  Mexican  grants  confirmed  by  the  United  States. 
The  United  States  system  of  surveys  does  not  extend  over  the 
Mexican  grants.  In  cases  where  the  16th  or  36th  sections  had  been 
disposed  of  by  the  United  States  before  the  cession  to  the  State, 
the  State  is  given  other  lands  selected  in  lieu  thereof.  Title  to  these 
lands  does  not  vest  in  the  State  or  a  purchaser  from  the  State  until 
properly  selected  and  listed  to  the  State  as  provided  by  the  Act  of 
March  3,  1853.  In  all  cases  when  dealing  with  State  lands  enquiry 
should  be  made  and  the  law  studied  to  ascertain  if  the  grant  under 
which  the  State  claims  title  requires  patenting  or  listing  by  the 
United  States  in  order  to  pass  title.  The  lands  so  granted  to  the 
State  are  sold  by  the  State  outright  to  citizens  of  the  State  under 
laws  relative  thereto  contained  in  the  Codes.    These  grants  to  the 


State  passed  all  mineral  titles  of  the  United  States  and  the  patents 
from  the  State  carry  all  mineral  rights.  It  might  be  well  to  state 
in  this  connection  that  no  lands  are  open  to  mining  locations  except 
vacant  lands  of  the  United  States, 

When  California  became  United  States  territor>%  we  inherited 
from  Spain  and  Mexico,  and  adopted  as  our  own,  certain  laws 
governing  estates  in  real  property  which  are  in  direct  opposition 
to  the  common  law  of  England,  which  law  applies  in  most  of  the 
States  of  the  Union,  except  as  modified  by  statute.  In  many  of  its 
features,  the  tenure  of  lands  in  California  bears  no  relation  to  that 
of  the  so  called  common  law  States.  The  estate  of  dower  and 
curtsey  never  existed  in  California.  Under  the  theory  of  the  com- 
mon law  of  England,  husband  and  wife  were  but  one  person.  The 
identity  of  the  wife  was  sunk  in  that  of  her  husband  upon  marriage. 
Nof^  so  under  the  Civil  Law,  and  which  was  handed  down  to  Cal- 
ifornia by  .Spain  and  Mexico.  Under  the  community  system  so 
called,  which  has  always  prevailed  in  California,  husband  and  wife 
are  considered  and  treated  somewhat  as  members  of  a  partnership. 
The  identity  and  individuality  of  the  wife  is  not  sunk  in  that  of  her 
husband  and  she  has  certain  rights,  privileges  and  duties  under  the 
law,  as  has  the  husband  as  we  shall  see  later.  This  American  com- 
munity system  prevails  ifAay  in  Louisiana,  Texas,  California,  Ne- 
vada, Arizona,  Washington,  Idaho  and  New  Mexicc  with  some 
differences  caused  by  statutory  enactments. 

As  we  have  said,  a  marked  distinction  exists  between  the  Civil 
and  Common  law  in  respect  of  the  Civil  rights  and  capacities  of 
husband  and  wife.  The  Civil  Law,  which  to  that  extent  prevails  in 
California  does  not  recognize  in  the  spouses  that  union  of  persons 
by  which  the  rights  of  the  wife  are  incorporated,  during  coverture 
with  those  of  her  husband.  On  the  contrary,  it  regards  the  husband 
and  wife  as  distinct  persons,  with  separate  rights  and  capable  of 
holding  rlistinct  and  separate  estates. 

The  fjrst  constitution  adopted  by  the  State  in  1849  contained 
the  following  clause:  "All  property  both  real  and  personal  of  the 
wife,  owned  or  claimed  before  marriage,  and  that  acquired  after- 
wards by  gift,  devise  or  descent  shall  be  her  personal  property." 
(Sec.  14,  Art.  XI.)  The  Constitution  of  1879,  Sec.  8,  Art.  XX, 
reads:  "All  jjropcrty,  real  and  personal,  owned  by  either  husband 
and  wife  before  marriage,  and  that  acquired  by  either  of  them  after- 
wards by  ^nU,  devise  or  descent  shall  be  their  separate  property." 
liy  an  Act  of  the  Legislature  passed  April  17,  1850,  (Acts  1850, 
Chap.  103 J  it  was  declared  that  all  jiroperty,  both  real  and  personal 
of  the  wife,  owned  by  her  before  marriage  and  that  acquired  after- 
wards by  gift,  devise  or  descent  shall  be  her  separate  property;  and 


all  property  both  real  and  personal  owned  by  the  husband  before 
marriage,  and  that  acquired  by  him  afterwards  by  yift,  devise  or 
descent  shall  be  his  separate  property,  and  that  all  property  acquired 
after  marriage  except  as  may  be  acquired  by  gift,  devise  or  descent 
shall  be  common  [jroperty.  'i'hc  husband  was  given  the  entire 
management  and  control  of  the  common  property,  with  the  like 
absolute  power  of  disposition  as  of  his  own  sejjarate  estate.  Thus 
we  see  that  under  this  law  any  conveyance  to  either  husband  or 
wife,  or  to  both  after  marriage,  unless  it  could  be  shown  that  the 
acquisition  was  by  gift,  devise  or  descent,  vested  the  title  absolutely 
in  the  husband  who  coulfl  make  deeds  alone.  Rven  if  the  deed  ran 
to  the  wife  in  her  own  name,  the  deed  by  the  husband  without 
joining  the  wife  was  sufficient  to  jjass  title.  This  condition  of 
affairs  existedj  until  1891,  when  the  Code  was  amended  to  read  as 
follows: 

"The  husbanrl  lias  the  management  and  control  of  the  com- 
munity property  with  the  h'ke  ahs'Awic  power  of  disposition  oilier 
than  testamentary,  as  he  Ii.is  of  his  sejiarate  estate;  provided,  how- 
ever, that  he  cannot  make  a  gift  of  such  community  property,  or 
convey  the  same  withrjut  a  vahiablc  consideration  unless  the  wife, 
in  writing  crmsents  thereto."  This  proviso  was  extended  to  fu-^ni- 
ture,  fiirnisliitigs  and  fittings  of  the  home,  clothing  and  wearing 
apparel  of  Ijjc  wife  or  minor  children,  which  is  community  jjroperty, 
by   Amendnient  of   I'Xjl . 

It  is  only  in  ca.ses  where  the  husband  attempts  tfj  part  with 
the  ofjnmiunity  property  without  a  valuable  consideration  that  the 
consent  of  the  wife  is  necessary.  It  is  not  necessary  that  she  join  in 
the  fleed,  so  long  a.s  she  con-ciil  to  the  L'in  in  writing.  ^'<'t,  it  is 
a  common  custom  to  rctpiire  her  to  join  in  the  deed  as  the  best 
evidence  of  her  consent.  Often  times,  cases  arise  where  it  is  im- 
pos.siblc  to  secure  the  signature  of  the  wife  when  sale  is  made  by 
the  husband.  A  pureli;iser  is  entitled  to  rely  upon  the  right  of  the 
husbajid  to  convey  if  the  erjiisideration  be  valuable — not  necessarily 
adequate.  Thus  if  I  t.ike  a  deed  from  the  husband  and  pay  a  valu- 
able ronsid<-rat i'Jii,  I  .ini  iclievcd  from  eii'iuiiing  iT  tiie  same  be 
conimiuiity  jjrojjerty,  oi-  otherwise,  for,  if  it  be  the  sejjaiate  ])ro])erty 
<)i  the  linsband,  the  wifi-  lias  ajjsolulely  no  rights  therein,  and  if  it 
be  cfMiimunity,  the  husbanfl  has  th(!  absolute  right  to  convey  alone, 
Sf)  long  as  the  consider.ition  be  valnable.  It  is  trne  tli;it  title  com- 
|..iiii'  will  base  their  jMiarantees  or  certihcates  of  title  u[Jon  the 
piesumplion  that  the  (onveyance  was  made  for  a  valuable  consid- 
eration, but  this  flifficulty  can  always  be  avoirlefl  by  putting  the 
transaction  in  escrow  with  the  certifying  company  that  they  may 
know  the  consideratifjn  is  valuable,  aiul  may  preserve  a  record  of 
the  transaction. 

11 


If  the  conveyance  be  to  either  husband  or  wife,  or  both  husband  ^sx 

and  wife,  before  May  19,  1889,  or  to  the  husband  alone  since  May 
19,  1889,  and  the  property  be  common  property,  the  husband  can 
mortgage  without  the  consent  of  the  wife.  If  the  deed  be  to  hus- 
band and  wife,  or  to  the  wife  alone,  since  May  19,  1889,  the  wife  can 
convey  or  mortgage  her  interest  without  the  husband  joining.  All 
this,  however,  in  the  absence  of  declaration  of  homestead,  for  when 
the  property  has  been  declared  a  homestead  at  any  time,  the  hus- 
band and  wife  must  join  in  any  conveyance  or  mortgage. 

Sec.  162  of  the  Civil  Code  declares  that  all  property  of  the  wife 
owned  by  her  before  marriage,  and  that  acquired  afterwards  by 
gift,  devise  or  descent  with  the  rents,  issues  and  profits  thereof  is 
her  separate  property  and  that  the  wife  may  without  the  consent 
of  her  husband  convey  her  separate  property.  Sec.  163,  C.C.  de- 
clares that  all  property  owned  by  the  husband  before  marriage  and 
that  acquired  afterwards  by  gift,  devise  or  descent,  with  the  rents, 
issues  and  profits  thereof,  is  his  separate  property.  Sec.  164,  Civil 
Code,  at  present  declares  that  all  other  property  acquired  after 
marriage  by  either  husband  or  wife,  or  both,  is  community  property, 
but  whenever  any  property  is  conveyed  to  a  married  woman  by  aii 
instrument  in  writing,  the  presumption  is  that  the  title  is  thereby 
vested  in  her  as  her  separate  property,  and  in  case  the  conveyance 
be  to  such  married  woman  and  to  her  husband,  or  to  her  and  any 
other  person,  the  presumption  is  that  the  married  woman  takes  the 
part  conveyed  to  her  as  tenant  in  common  unless  a  different  inten- 
tion is  expressed  in  the  instrument,  and  this  presumption  is  con-  ^* 
elusive  in  favor  of  a  purchaser  or  encumbrancer  in  good  faith  and 
for  a  valuable  consideration. 

It  is  provided  that  in  cases  where  the  married  woman  acquired 
title  before  May  19,  1889,  the  husband  and  his  heirs  are  debarred 
from  maintaining  any  action  to  show  that  the  property  was  com- 
munity property  as  follows :  In  cases  where  the  married  woman 
deeded  before  the  passage  of  the  act,  one  year  after  May  19,  1889, 
and  in  cases  where  she  deeded  after  the  passage  of  the  Act,  within 
one  year  after  the  date  of  the  record  of  her  deed.  The  object  of 
this  amendment  is  obvious.  The  law  permits  the  husband  to  take 
the  title  to  community  property  in  the  name  of  the  wife.  So  long 
as  she  holds  it  and  does  not  deal  with  it  either  with  purchasers  or 
encumbrancers  in  good  faith  and  for  value,  the  husband  or  his 
heirs,  or  his  creditors  are  permitted  to  show  that  the  property  is 
in  fact  the  property  of  the  community  and  subject  to  the  control 
and  disposition  of  the  husband.  But  where  she  has  been  held  out 
to  the  world  as  an  owner  and  entitled  to  deal  with  the  property,  the 
husband,  his  heirs  or  his  creditors  are  estopped  to  deny  this  when 

12 


she  has  sold  or  encumbered  in  good  faith  for  a  valuable  considera- 
tion. Therefore  in  cases  where  the  wife  has  acquired  title  since 
May  19,  1889,  it  is  not  necessary  that  her  husband  join  with  her  in 
any  deed  or  mortgage  unless  the  property  be  a  homestead.  The 
presumption  in  favor  of  a  purchaser  or  encumbrancer  in  good  faith 
and  for  value  is  conclusive  and  final  and  the  husband,  his  heirs  or 
creditors  can  never  break  through  it.  The  Act  was  passed  to  re- 
lieve such  purchasers  or  encumbrancers  from  making  enquiry  as  to 
the  nature  of  her  estate.  He  is  in  no  way  concerned,  for,  if  it  be 
her  separate  estate,  her  husband  never  had  any  interest,  and,  if  it  be 
community  the  law  protects  one  so  dealing  with  her  by  a  conclusive, 
undeniable  presumption  that  the  property  was  in  fact  her  separate 
estate.  A  clear  understanding  of  this  will  facilitate  such  dealings.* 
Often  times  the  signature  of  a  wife  or  husband  is  demanded  to  a 
deed  or  mortgage  when  there  is  absolutely  no  necessity  for  it.  The 
law  permits  the  husband  or  wife  to  deal  with  his  or  her  own  sep- 
arate property  without  interference  or  control  by  the  other. 

A  deed  from  one  spouse  to  the  other,  or  a  proper  contract  for 
that  purpose,  has  the  effect  to  vest  the  property  dealt  with  in  the 
^ouse  receiving  it. as  separate  property.  The  rights  of  husband 
and  wife  as  to  any  property  may  be  fixed  by  marriage  contract 
irrespective  of  the  statute.  It  may  be  well  to  note  here  to  what 
extent  the  property  of  the  spouses  is  liable  for  the  debts  of  either. 
The  property  of  the  community  is  not  liable  for  the  contracts  of  the 
wife  made  after  marriage  unless  secured  by  a  mortgage  or  pledge 
thereof  executed  by  the  husband.  The  separate  property  of  the 
husband  is  not  liable  for  the  debts  of  the  wife  contracted  before 
the  marriage.  The  separate  property  of  the  wife  is  liable  for  her 
own  debts  contracted  before  or  after  her  marriage,  but  is  not  liable 
for  her  husband's  debts;  but  such  property  is  liable  for  the  payment 
of  debts  contracted  by  the  husband  or  wife  for  the  necessaries  of  life 
furnished  to  them,  or  either  of  them,  while  they  are  living  together. 
But  this  proviso  only  applies  to  such  of  her  separate  property  as 
may  be  such  by  reason  of  a  gift  from  the  husband.  For  civil  in- 
juries committed  by  a  married  woman,  damages  may  be  recovered 
from  her  alone,  and  her  husband  is  not  liable  therefor,  except  in 
cases  where  he  would  be  jointly  liable  with  her  if  the  marriage  did 
not  exist.  The  wife  must  support  the  husband,  when  he  has  not 
deserted  her,  out  of  her  separate  property,  when  he  has  no  sep- 
arate property,  and  there  is  no  community  property,  and  he  is 
unable  from  infirmity  to  support  himself. 

Reverting  to  the  topic  of  ownership  of  Estates.  The  ownership 
of  property  by  a  single  person  or  corporation  is  known  as  a  sole 
or  several  ownership.  Here  no  question  as  to  interest  arises.  The 
'ownership  of  property  by  several  persons  is  either: 

13 


1.  Of  joint  interests. 

2.  Of  partnership  interests. 

3.  Of  interests  in  common. 

4.  Of  community  interest  of  husband  and  wife. 

A  joint  interest  or  joint  tenancy,  as  it  is  generally  termed,  is  a 
peculiar  estate  in  this :  It  is  one  owned  by  several  persons,  in  equal 
shares,  by  a  title  created  by  a  single  will  or  transfer  when  expressly 
declared  in  the  will  or  transfer  to  be  a  joint  tenancy,  or  when 
granted  to  executors  or  trustees  as  joint  tenants  (Sec.  683  C.C.). 
The  essentials  to  the  creation  of  such  an  estate  are  these :  that  the 
title  be  conveyed  by  one  instrument  which  expressly  declares  that 
the  same  is  to  be  held  in  joint  tenancy.  The  effect  of  such  a  grant 
or  will  is  to  vest  the  title  in  each  and  all ;  that  is  to  say,  that  each 
grantee  or  devisee,  as  among  themselves  and  as  to  succession,  owns 
all  the  title  at  all  times  so  that  the  death  of  one  of  them  does  not 
change  the  title  at  all.  It  rests  as  under  the  original  creation  in  the 
survivors.  This  fiction  of  the  law  has  no  bearing  on  the  rights  of 
strangers  to  the  title.  It  only  exists  to  give  the  right  of  succession 
to  a  survivor.  This  theory  of  joint  ownership  is  of  no  concern  to 
a  grantee,  mortgagee  or  creditor  of  any  joint  tenant.  It  applies 
only  to  the  tenants  themselves  and  among  themselves.  The  share 
of  one  of  the  tenants  dying  does  not  descend  to  heirs  nor  can  it 
be  willed  away  from  the  survivor.  The  last  survivor  holds  all  as" 
he  "did  from  the  creation  of  the  estate.  This  plan  of  vesting  an 
estate  is  most  often  resorted  to  in  the  creation  of  trusts  or  in  devises 
to  executors.  It  has  become,  however,  a  common  practice  in  this 
community  to  create  such  an  estate  in  husband  and  wife  in  cases 
where  it  is  desired  that  the  survivor  shall  have  all. 

The  joint  tenancy  can  be  destroyed  at  any  time  by  one  of  the 
joint  tenants  conveying  his  interest  to  a  stranger  or  by  deed  by 
either  spouse  to  the  other  if  the  joint  tenancy  be  in  husband  and 
wife,  or  by  execution  sale  of  the  interest  of  either.  A  corporation 
cannot  be  a  joint  tenant  nor  can  a  joint  tenancy  be  created  by  any 
person  but  the  grantor  or  devisor.  It  cannot  be  created  by  agree- 
ment nor  by  deed  between  the  parties  themselves.  It  MUST  be  by 
transfer  or  will.  Personal  property  such  as  notes,  bonds  and  shares 
of  stock  can  be  held  in  joint  tenancy,  for  the  execution  and  deliv- 
ery of  the  security  or  shares  of  stock  is  equivalent  to  a  grant.  By 
special  statute,  bank  accounts  may  be  held  in  joint  tenancy.  These 
estates  are  not  favored  in  law  as  they  tend  to  cut  off  the  natural 
rights  of  heirs  and  g-reat  care  must  be  exercised  in  their  creation 
as  I  shall  point  outwhen  we  come  to  the  subject  ofjleeds.  A  part- 
nership interest  is  one  owned  by  several  persons  in  partnership  for 
partnership  purposes.     (Sec.  684  C.C.) 

14 


It  must  be  remembered  that  a  partnership  as  such,  or  any 
association  of  individuals  as  such  cannot  take  title.  Those  who 
compose  a  partnership  or  association  may  own  property,  but  as  such 
partnerships  or  associations  they  cannot  be  grantees  for  there  is 
no  legal  entity.  In  the  case  of  a  partnership  to  vest  a  title  in  the 
several  partners,  the  deed  must  run  to  them  in  their  individual 
names.  Whether  or  not  it  be  partnership  property  is  only  the  con- 
cern of  the  partners  or  their  creditors.  One  taking  a  deed  from 
the  partners  is  in  no  way  concerned.  If  a  deed  run  to  "Sunset 
Realty  Company,  a  partnership,"  the  deed  is  void.  If  it  run  to  Sun- 
set Realty  Company,  composed  of  John  Smith  and  William  Jones, 
the  individuals  take  title  and  the  deed  out  must  be  from  them.  If 
the  deed  run  to  George  Smith  &  Co.,  a  partnership,  the  title  vests  in 
George  Smith,  and  a  deed  from  him  will  pass  the  title.  Purchasers 
dealing  with  partnership  property  may  treat  the  partners  as  tenants 
in  common. 

An  interest  in  common  is  one  owned  by  several  persons,  not  in 
joint  ownership  or  partnership  (Sec.  685)  and  every  interest  created 
in  favor  of  several  persons  in  their  own  right  is  an  interest  in  com- 
mon unless  acquired  by  them  in  partnership,  for  partnership  pur- 
poses, or  unless  declared  in  its  creation  to  be  a  joint  interest. 

The  dilTerence  between  joint  tenancy  and  a  tenancy  in  common 
is  this :  In  a  tenancy  in  common  each  tenant  owns  a  proportionate 
share  of  the  property,  which  descends  to  his  heirs,  his  interest  being 
severed  from  that  of  his  co-tenants.  His  conveyance  of  his  interest 
to  a  stranger  does  not  destroy  the  estate :  He  may  hold,  say,  one 
third  in  interest,  and  his  co-tenant  two  thirds.  Under  a  joint  ten- 
ancy the  shares  are  equal ;  as  between  the  tenants  each  owns  all. 
Upon  a  severance  of  a  joint  tenancy  by  the  conveyance  of  one  tenant 
the  estate  then  becomes  a  tenancy  in  common  among  the  owners. 
Where  there  be  three  joint  tenants  and  one  conveys,  his  grantee 
takes  a  third  interest  as  tenant  in  common ;  the  others  holding  be- 
tween themselves  the  remaining  two  thirds  as  joint  tenants. 

There  is  but  little  practical  difference  between  these  estates, 
except  so  far  as  they  affect  trusteeships  and  heirs  and  creditors  of 
the  tenant  after  his  death.  Upon  his  death  his  interest  is  gone — 
there  is  no  estate  in  him.  When  alive  he  can  deal  with  the  property 
by  deed  or  mortgage,  and  his  interest  is  subject  to  execution.  In 
no  case  can  either  estate  be  subject  to  homestead  except  in  cases 
where  husband  and  wife  are  the  joint  tenants  or  co-tenants.  In 
every  other  instance,  such  estates  can  be  as  freely  dealt  with  as  sole 
estates. 

In  conclusion,  I  call  to  your  attention  some  things  you  will  do 
well  to  remember.     Remember  that  an  estate  in  lands  cannot  be 

15 


held  by  a  partnership  as  such,  or,  an  unincorporated  association  as 
such ;  that  a  deed  to  "Sunset  Realty  Company",  if  it  be  not  a  cor- 
poration, is  void ;  that  a  deed  to  "Sunset  Pleasure  Club",  it  being 
an  unincorporated  association,  is  void.  When  tendered  a  deed  from 
such  a  grantor,  refuse  it,  for  it  passes  no  title. 

Remember  that  the  wife  has  no  control  over  the  common 
property.  Do  not  extend  her  credit  where  her  only  claim  to  prop- 
erty is  a  community  interest,  without  the  contract  of  her  husband. 
Remember  that  the  husband's  separate  property  is  not  liable 
for  the  debts  of  the  wife  contracted  before  marriage,  so  do  not  ex- 
tend credit  to  a  lady  without  separate  property  on  the  strength  of 
her  impending  marriage  to  a  rich  man. 

Remember  that  the  wife's  separate  property  is  not  liable  for 
the  husband's  debts.  There  is  nothing  in  the  law  which  forbids 
or  prevents  the  wife  from  paying  the  husband's  debts  out  of  her 
separate  estate,  if  she  chooses  so  to  do,  but  all  contracts  with  a 
stranger  whereby  her  separate  estate  is  sought  to  be  bound  for  her 
husband's  debts  are  void  unless  the  consideration  moves  to  her. 
Therefore,  when  you  know,  or  have  reason  to  believe,  that  the  sep- 
arate property  of  the  wife  is  being  mortgaged,  or  pledged,  to  secure 
a  debt  of  the  husband,  require  the  wife  to  sign  the  note  and  mort- 
gage or  other  security,  and  pay  the  proceeds  to  her  alone.  When 
she  has  received  the  consideration  it  is  no  concern  to  the  one  dealing 
with  her  what  use  she  makes  of  them. 

Remember  that  the  wife  can  convey  or  mortgage  her  separate 
property  or  that  which  is  presumed  to  be  her  separate  property,  in 
cases  where  she  has  acquired  title  since  May  19,  1889,  without  the 
consent  of  her  husband. 

Remember  that  the  husband  can  convey  or  motgage  his  sep- 
arate property  without  the  consent  of  the  wife  and  can  always 
mortgage  the  community  property  without  the  consent  of  the  wife 
and  can  convey  the  same  without  her  consent  if  he  receives  a  valu- 
able consideration.  Remember  that  the  interest  of  a  joint  tenant 
in  lands  held  in  joint  tenancy  ceases  upon  his  death.  The  estate 
does  not  descend  to  the  heir.  There  is  nothing  to  administer  upon. 
His  interest  dies  with  him.  Be  cautious  then  in  extending  too  lib- 
eral a  credit  to  one  whose  property  is  so  held  unless  you  take  a 
mortgage  or  pledge  of  the  property  so  held.  The  lien  will  survive 
his  death,  but  an  unsecured  debt  is  no  claim  against  the  property 
after  his  death. 

Remember  that  in  all  cases  where  the  property  is  a  homestead, 
husband  and  wife  must  join  in  deeds  or  mortgages,  no  matter  what 
the  nature  of  the  estate  may  be,  and  that  their  act  must  be  a  per- 
sonal one  by  one  instrument.  They  cannot  act  in  dealing  with  the 
homestead  by  an  attorney,  in  fact. 

16 


11. 

Essentials  of  a  Deed 

Any  form  of  written  instrument  which  contains  apt  words  of 
conveyance,  such  as  "grant,"  "transfer,"  "sell  and  convey"  and  the 
like  is  sufficient  to  pass  title  to  lands  in  California.  There  is  no 
fixed  and  absolute  form.  Section  1092  C.C.  provides  that  a  grant 
in  real  property  may  be  made  in  substance  as  follows : 

I,  A.  B.,  grant  to  C.  D.  all  that  real  property  situated  in  (insert 
name  of  County)  County,  State  of  California,  bounded  or  described 

as  follows:  (here  insert  description).    Witness  my  hand  this 

day  of Signed,  "A.  B." 

This  form  of  deed  is  much  used,  and  is  sufficient  to  pass  the 
full  fee  and  any  title  which  the  grantor  may  afterward  acquire 
which  may  be  adverse  to  that  granted  by  the  deed.  A  quit  claim 
deed  may  be  in  the  same  form,  changing  the  word  "grant"  to  "re- 
mise and  quit  claim"  or  simply  "quit  claim."  A  quit  claim  deed 
passes  the  title  of  the  grantor  as  fully  as  a  grant  deed  to  all  interest 
owned  by  him  at  the  date  of  the  deed,  but  does  not  pass  any  title 
which  he  may  subsequently  acquire  adverse  to  that  which  he  has 
quit  claimed.  A  deed  containing  the  words,  "grant  all  my  right, 
title  and  interest  in,"  etc.,  is  a  quit  claim.  Care  must  be  exercised 
in  using  the  code  form  of  deed  to  insert  the  proper  personal  pro- 
noun, either  "I"  or  "We,"  as  the  case  may  be,  before  the  names  of 
the  grantor  or  grantors,  and  to  insert  the  name  of  the  grantor  or 
grantors  in  the  body  of  the  deed. 

A  transfer  is  defined  by  the  Civil  Code  to  be  an  act  of  the 
parties,  or  by  the  law,  by  which  the  title  to  property  is  conveyed 
from  one  living  person  to  another.  Property  of  any  kind  may  be 
transferred,  except  a  mere  possibility  not  coupled  with  an  interest. 
Thus  the  possible  future  interest  of  a  son  in  his  father's  property, 
which  may  upon  the  death  of  the  father  vest  in  the  son,  is  not 
transferable.  Likewise  the  possible  interest  of  the  wife  in  the  com- 
munity property  which  may  be  hers  upon  the  dissolution  of  the 
community  by  death  or  divorce,  is  not  transferable  by  her  alone. 
A  conveyance  may  be  made  of  all  property  owned  by  the  grantor  at 
the  date  of  the  conveyance  in  general  terms,  but  such  a  conveyance 
will  not  pass  title  to  property  subsequently  acquired  by  the  grantor, 

17 


for  there  can  be  no  delivery  as  to  such  property  when  the  deed 
passes,  and,  as  we  shall  presently  see,  a  deed  without  delivery  is 
a  nullity. 

We  come  now  to  consider  who  may  acquire  and  dispose  of 
property.  In  general,  every  person  who  is  legally  competent  to 
bind  himself  by  contract  may  convey  his  property  by  deed,  or  may 
empower  another  to  do  so  for  him.  There  are  certain  disabilities 
under  which  persons  may  be  laboring  that  render  them  incapable 
of  making  a  valid  contract ;  such  as  the  disability  of  infancy  or  in- 
sanity. Corporations  may  acquire  and  convey  property  as  freely  as 
natural  persons,  except  that  the  law  weaves  about  their  transac- 
tions certain  formalities  which  must  be  observed.  There  are  stat- 
utes restricting  nearly  every  corporation  in  the  amount  and  nature 
of  property  which  may  be  owned  by  it,  but  these  are  of  no  concern 
to  the  person  dealing  with  its  property.  No  individual  is  per- 
mitted to  question  the  legal  right  of  any  corporation  to  acquire  or 
dispose  of  property.  This  is  a  question  for  the  State  alone.  The 
State  may  at  any  time  proceed  against  a  corporation  to  compel  it 
to  dispose  of  its  property  held  contrary  to  law  and  may  forfeit  its 
franchise  for  disobeying  the  mandate  of  the  statutes,  but  no  in- 
dividual is  required  to  ascertain  when  he  deals  with  a  corporation  if 
it  holds  property  in  excess  of  the  statutory  limit.  A  deed  to  pass 
title  to  a  corporation  must  name  the  corporation,  as  such,  as 
grantee.  A  deed  to  the  directors,  or  officers  or  stockholders  will 
not  vest  title  in  the  corporation.  In  conveying  land  the  corpora^: 
tinn  can  act  onlv  throug-h  its  board  of  directors  or  trustees  acting 

as   such    at    regular    -Jccpmhlprl    mpptinp^^    _Th<^    Hirprtnrt;    rannnt    art 


as  individuals — they  must  act  as  a  board.  The  officers  of  a  corpora- 
tion have  no  power  to  convey  property  without  the  authority  of 
the  board  of  directors  or  trustees  acting  as  such.  It  follows  that 
^ne  dealing  with  a  corfipratinn  whereby  he  receives__a  conveyance 
or  mortgage  must  be  assured  that  the  officers  executing  it_wgre 
authorized^o  to  do  by  the  governing  body_  of  the  corporation.. 
Tlie  recital  in  the  deed  that  the  same  was  duly  authorized  is 
prima  facie  evidence  of  the  fact  and  may  be  relied  upon  if  no 
other  circumstances  appear  to  excite  enquiry.  Where  these  re- 
citals do  not  appear  enquiry  must  be  made  to  ascertain  if  in  fact 
the  conveyance  was  authorized —  A  conveyance  executed  by  any 
officer  or  officers,  and  not  in  the  name,  and  as  the  act  and  deed  of 
the  corporation  is  a  nullity  and  no  subsequent  resolutions  of  the 
governing  board  can  make  it  good,  for  a  void  deed  cannot  under 
any  circumstances  be  made  a  good  deed.  Under  certain  circum- 
stances, as  where  the  corporation  has  received  the  proceeds,  it  will 
be  estopped  in  law  from  denying  the  deed,  but  this  doctrine  of 

18 


estoppel  does  not  operate  to  make  a  void  deed  a  good  deed. 
It  is  merely  an  application  of  the  doctrine  that  no  man  shall  be 
permitted  to  take  advantage  of  his  own  wrong. 

If  the  public  records  do  not  disclose  the  contrary  one  is  en- 
titled to  rely  upon  the  presumption  that  his  grantor  holding  itself 
out  and  describing  itself  as  such  in  its  deed  is  a  legally  organized 
and  existing  corporation.  The  certificate  of  incorporation  by  the 
Secretary  of  State  is  sufficient  evidence  of  the  legality  of  the  cor- 
poration and  its  right  to  do  business,  for  no  individual  can  ques- 
tion these  matters  when  the  State  has  once  granted  a  charter. 

In  California,  where  corporation  charters  are  forfeited  auto- 
matically upon  failure  to  pay  franchise  or  license  taxes,  one  must 
ascertain  by  examination  of  the  records  in  the  County  Clerk's 
ofifice  or  of  the  records  of  the  Secretary  of  State,  whether  or  not 
the  charter  of  his  grantor  has  been  forfeited.  Upon  forfeiture  of 
its  charter  the  corporation  no  longer  exists.  The  board  of  direc- 
tors as  such,  and  all  officers,  as  such,  of  the  defunct  corporation, 
have  no  powers.  A  corporation  may  by  proper  proceedings  taken 
in  court  be  dissolved  and  the  court  will  appoint  a  trustee  for  the 
stockholders  and  creditors  to  wind  up  the  affairs  of  the  corpora- 
tion. The  title  to  all  property  of  the  late  corporation  is  vested  in 
the  trustee  for  that  purpose  by  deed  of  all  property  made  by  the 
corporation  before  its  dissolution  or  by  operation  of  law  after  its 
dissolution.  He  does  not  act  in  an  individual  capacity.  His  deeds 
must  contain  recitals  as  to  his  capacity  and  authority,  otherwise 
it  passes  only  such  individual  interest  as  he  may  own. 

When  the  charter  is  automatically  forfeited  the  title  to  all 
property  is  vested  in  the  members  of  the  Board  of  Directors  in 
office  at  the  date  of  forfeiture,  as  joint  tenants,  and  as  trustees  for 
the  creditors  and  stockholders  of  the  late  corporation.  They  no 
longer  act  as  a  Board  of  Directors,  but  the  full  title  to  the  prop- 
erty is  vested  in  them  and  the  survivors  of  them.  They  cannot 
make  deeds  in  the  name  of  the  corporation,  for  it  no  longer  exists. 
Unfortunately  our  statutes  provide  no  method  of  giving  public 
notice  of  the  identity  of  such  trustees.  One  dealing  with  such 
trustees  must  make  investigation  to  ascertain  who  were  in  fact  the 
directors  in  office  at  the  date  of  the  forfeiture,  and  if  his  grantors 
be  all  of  such  persons  or  the  survivors  of  them.  It  is  upon  this 
investigation  and  recitals  in  his  deed  that  he  must  rely.  Hence 
it  is  important,  and  in  my  opinion  necessary,  that  the  deed  from 
the  trustees  recite  the  fact  of  forfeiture,  the  names  of  the  persons 
who  became  trustees,  the  names  of  those  who  survive  and  are 
acting,  and  the  capacity  in  which  they  act.  The  deed  must  be 
executed   and   acknowledged    as    trustees     for   the    creditors     and 

19 


stockholders  of  the  defunct  corporation.  It  must  be  remembered 
that  there  are  no  statutory  forms  of  such  deeds,  hence  it  is  highly 
important  that  the  deed  contain  every  detail  of  devolution  of  title 
and  capacity  of  the  grantors,  for  upon  these  recitals  the  grantee 
is  compelled  to  a  great  extent  to  rely.  Remember  also  that  all 
of  the  trustees  or  survivors  must  act  for  the  full  title  is  vested  in 
each  one  of  them.  The  execution  by  a  majority  is  not  sufficient. 
All  must  join  in  the  deed.  No  one  of  such  trustees  can  convey 
to  the  others,  nor  can  he  delegate  his  powers  to  any  of  the  others, 
for  his  is  a  trusteeship.  And  such  trustee  powers  cannot  be  dele- 
gated in  absence  of  statute  authorizing  such  delegation. 

Minors  in  this  State  are  males  under  21  years  of  age  and  fe- 
males under  18  years  of  age.  A  minor  cannot  give  a  Power  of 
Attorney,  nor,  being  under  the  age  of  18  years,  make  a  contract 
relating  to  real  property.  Such  a  contract  made  by  a  minor  under 
the  age  of  18  years  need  not  be  disaffirmed  by  the  minor  either 
before  majority  or  within  a  reasonable  time  afterwards,  or  in 
case  of  death  by  the  heirs  or  personal  representatives  of  the 
minor  for  the  contract  is  void  from  the  beginning.  And  if  the 
contract  be  made  by  a  minor  whilst  he  is  over  the  age  of  18  years 
it  may  be  disaffirmed  by  the  minor  himself  upon  reaching  ma- 
jority, or  within  a  reasonable  time  thereafter,  or  by  his  heirs  or 
legal  representatives,  if  the  minor  die  within  the  period  upon  re- 
storing the  consideration  to  the  party  from  whom  it  is  received 
or  paying  its  equivalent.  It  would  thus  appear  that  any  contract 
in  relation  to  real  estate  made  by  a  female  minor,  or  a  male 
minor  under  the  age  of  18,  is  void  and  no  disaffirmance  is  nec- 
essary. 

A  minor,  however,  cannot  disaffirm  a  contract  otherwise  valid 
to  pay  the  reasonable  value  of  things  necessary  for  his  support, 
or  that  of  his  family  entered  into  by  him  or  her  when  not  under 
the  care  of  a  parent  or  guardian  able  to  provide  the  same.  The 
deed  of  a  minor  over  the  age  of  eighteen  is  not  void  but  voidable 
only.  The  title  passes  subject  to  be  defeated  by  disaffirmance  by 
the  minor,  or  the  heirs  or  personal  representatives  of  the  minor. 
The  time  within  which  he  must  disaffirm  is  not  settled.  It  de- 
pends entirely  upon  the  circumstances  of  each  individual  case. 
The  term  "within  a  reasonable  time"  is  an  elastic  one.  It  is 
therefore  wise  in  taking  a  deed  to  know  that  your  grantor  is  of 
full  age. 

A  person  entirely  without  understanding  has  no  power  to 
make  a  contract  of  any  kind,  but  he  is  liable  for  the  reasonable 
value  of  things  furnished  to  him  necessary  for  his  support  or  the 
support  of  his  family.    A  conveyance  or  other  contract  of  a  person 

20 


of  unsound  mind,  but  not  entirely  without  understanding,  made 
before  his  incapacity,  as  has  been  judicially  determined  may  be  re- 
scinded by  such  person  if  he  proceed  promptly  to  restore  to  the 
other  party,  or  ofifer  to  restore  everything  of  value  which  he  has 
received.  After  his  incapacity  has  been  judicially  determined  a 
person  of  unsound  mind  can  make  no  conveyance  or  other  con- 
tract, nor  delegate  any  power  or  waive  any  right,  until  his  restora- 
tion to  capacity.  A  certificate  from  the  medical  superintendent 
or  resident  physician  of  the  insane  asylum  to  which  such  person 
may  have  been  committed,  showing  that  such  person  has  been 
discharged  therefrom  cured  and  restored  to  reason,  is  sufficient  to 
establish  the  presumption  of  such  person  from  the  time  of  such 
discharge.  So  the  deed  of  one  who  has  been  adjudged  insane  af- 
ter such  judgment  and  before  restoration  to  capacity  is  abso- 
lutely void.  So  also  is  the  deed  of  an  incompetent  while  he  has  a 
guardian. 

The  question  naturally  suggests  itself  what  enquiry  should  one 
make  when  tendered  a  deed  as  to  the  legal  status  and  capacity  of 
all  persons  who  may  appear  in  the  chain  of  title.  Manifestly  it  is 
impossible  in  every  case  to  investigate  with  any  degree  of  certainty 
or  hope  of  success  of  ascertaining  if  every  grantor  in  the  chain  of 
title  was  an  adult  of  sound  mind  and  under  no  legal  restraints. 
I  conceive  it  to  be  the  legal  duty  of  one  purchasing  land  to  ascer- 
tain by  proper  enquiry  if  the  person  from  whom  he  is  about  to  take 
a  deed  has  legal  capacity  to  deed.  Surely  this  is  not  onerous.  If 
he  be  a  purchaser  in  good  faith  and  for  value  and  without  notice, 
actual  or  constructive,  of  any  such  defect  in  title,  he  is  protected, 
provided  he  has  used  ordinary  care  and  diligence.  The  law  does  not 
impose  upon  him  impossible  conditions,  but  he  is  not  protected 
if  he  has  actual  knowledge  that  his  grantor  has  no  capacity  to  con- 
tract, or  if  he  has  knowledge  of  such  facts  and  circumstances  as 
would  put  a  prudent  man  upon  enquiry.  If  the  defects  appear  of 
record  he  is  bound  whether  he  has  actual  knowledge  or  not.  The 
notice  given  by  public  records  is  termed  "constructive  notice,"  and 
such  facts  as  are  disclosed  by  the  public  records  are  notice  to  the 
whole  world  of  claims  of  right,  or  possible  claims  of  right,  and  one 
dealing  with  the  land  affected  thereby  is  bound  by  such  notice 
regardless  of  any  enquiry.  He  is  not  an  innocent  purchaser  if 
facts  appear  in  the  record  which  are  sufficient  to  put  a  prudent 
man  upon  enquiry  as  to  their  truth.  Thus  if  it  appear  by  the 
public  records  that  "A,"  the  grantor  in  a  chain  of  title,  was  a  minor 
at  the  date  of  the  deed,  "A"  may  disaffirm  and  recover  the  land 
from  any  subsequent  grantee  if  he  proceed  in  time  for  any  grantee 
is  held  to  have  notice  from  the  record  of  "A's"  legal  right.     Like- 

21 


wise  if  it  appear  from  the  record,  we  will  say,  in  proceedings  where- 
in "A"  was  adjudged  to  be  insane  and  committed,  and  it  appear  from 
the  proceedings  that  he  was  insane  at  the  time  he  made  his  deed 
this  fact  is  enough  to  give  notice  to  any  subsequent  grantee  that 
"A"  has  a  right  to  rescind  upon  restoration  to  capacity.  Again,  if 
the  record  discloses  that  the  deed  was  made  by  "A"  after  commit- 
ment, or  after  the  appointment  of  a  guardian,  any  grantee  must  be 
held  to  have  notice  that  his  deed  was  void  and  "A"  can  recover  the 
land  from  any  grantee.  Not  so,  however,  if  the  record  be  silent. 
If  there  be  no  record  notice  of  disability  of  any  character  and  one 
purchases  for  a  valuable  consideration  and  without  knowledge  of 
any  such  defect  he  is  protected  by  law  in  his  purchase,  and  the  one 
seeking  to  disaffirm  or  rescind  must  look  to  the  proceeds  of  sale 
and  not  to  the  land  itself.  It  must  be  borne  in  mind  that  a  pur- 
chaser is  not  innocent  who  has  knowledge  of  such  a  defect,  or  has 
such  information  relative  thereto  that  by  careful  enquiry  he  could 
learn  the  true  state  of  affairs.  He  is  held  to  be  bound  by  such  facts 
as  he  might  have  discovered  had  he  made  enquiry.  In  this  cate- 
gory full  deeds  executed  by  a  person  in  such  a  state  of  intoxication 
that  he  is  incapable  of  giving  an  intelligent  consent  to  a  contract, 
and  those  executed  by  persons  under  duress,  restraint  or  undue 
influence,  and  deeds  secured  by  fraud  and  misrepresentation.  All 
such  deeds  are  voidable,  not  void.  As  the  record  by  the  nature  of 
things,  will  not  disclose  these  facts,  an  innocent  purchaser  for  value 
is  protected.  But  any  circumstance  or  fact  coming  to  the  knowledge 
of  an  intending  purchaser  sufficient  to  put  him  upon  enquiry  as  to 
such  defects  takes  him  out  of  the  class  of  innocent  purchasers. 

We  have  on  the  statute  books  of  California  what  is  termed  the 
Alien  Land  Law,  whereby  persons  not  eligible  to  citizenship  are 
prohibited  from  owning  lands  within  the  State.  Likewise  we  have 
a  law  which  prohibits  foreign  corporations  from  dealing  in  lands 
in  this  State  unless  they  shall  comply  with  requirements,  certain 
Acts  of  the  Legislature.  It  is  sufficient  to  say  that  no  individual  is 
concerned  with  the  enforcement  of  these  laws.  No  individual  can 
question  the  right  of  any  alien  to  own  land,  and  it  is  not  encumbent 
upon  any  individual  to  enquire  whether  his  grantor  or  grantee  be 
an  alien.  It  is  a  pubic  question  solely  and  the  penalty  is  forfeiture 
of  title  in  proceedings  by  the  State.  Take  the  case  of  a  Japanese 
alien.  If  land  is  deeded  to  him  after  this  act  went  into  effect  a  deed 
by  him  is  a  strict  fulfillment  of  the  object  of  the  law.  There  is  no 
penalty  imposed  upon  one  who  conveys  to  him.  If  you  take  a 
mortgage  on  his  land  the  only  risk  you  run  is  in  having  it  paid 
before  maturity  upon  forfeiture  to  the  State.  If  you  foreclose  you 
have  compelled  the  alien  to  comply  with  the  law.  Manifestly  it  was 


■were  annc 
Ices  of  the 

new  tariff. 
mt  the  sar 
•ts  as  thos 
rom   territi 
Iver,  from 
I  State  line 
go   Into   ef 
orts  Decen 
ecember  3 
lew  arrang 
ig     to     th 
rom    reliev 
t  of  New 
shipments 
d  Europe, 
lie,  the  sta 
ited    States 
;ate    more 
fVintlc  and 
le  announc 
been  asslg 
York  becav 
ingr   the    gr 
rt  tonnage 
;oncentratI( 
to    the    di 
favor  of 
ion   of  the 
i  this  con< 
relieved. 

00  CAL 
IICE  HI 


OPERAT< 
7  INCREAl 
PAIR  TO  < 

fBT  A.  P.  r 

YORK.  N 

enera  made 

Ible"    profl 

-       A, 


22 


at  the  gen- 
irn  Railroad 


not  the  intent  of  the  legislature  to  impose  loss  upon  its  own  citizens 
as  would  happen  if  the  mortgage  became  void  on  forfeiture.  There 
is  no  means  of  knowing  whether  these  people  with  Chinese  or 
Japanese  names  be  alien  or  not.  If  the  mortgagee  were  obliged  to 
secure  absolute  proof  that  his  mortgagor  was  a  citizen  of  the  United 
States  before  he  could  safely  loan  him  money  one  could  not  safely 
loan  to  any  one.  John  Smith  may  be  a  citizen  of  Japan,  while  Sam 
Sing  may  be  a  native  born  Californian.  Granting  that  the  identity 
Meanwhile    America' s~Tnvoy'^^  established  to  the  satisfaction 


1,  in  effect, 
ss  to  south- 
yed  by  New 
orth  of  the 
Ohio-Penn- 
)  Mississippi 
1  South  At- 
and  to  Gulf 

Is  expected, 
Touncement, 
mgre.'^tion  at 
to  oxpedlte 
;in-America, 

0  will  make 
;  clclms,  for 
ping    Board 

1  vessels  to 
ports.  These 

says,  large- 
)  routes  out 
he  necessity 
)ncentratlon 
that  port. 

due,  it  was 
ial  inland 
■"ork.  With 
tariffs  it  Is 
Ion  will  be 


is  in  Penitentiary, 


OAL 
INOUGH. 


PROFITS 
>ULD  BE 
rMERS. 

.E.^ 

. — Soft  coal 

)cking     and 

1917     and 

that     they 


(Continued  from  First  Page.) 

that  the  Mexican  Cabinet  had  the 
note  under  consideration  Friday 
and  that  Gov.  Cabrera  of  Puebla 
was  called  in  from  Puebla  for  re- 
port." 

EXPECT    A    REFUSAL,. 

A  dispatch  bearing  on  the  Jenkins 
case  was  received  yesterday  at  the 
Mexican  Embassy  and  it  was  as- 
sumed that  this  was  Mexico's  reply. 
While  there  has  been  no  Indication 
as  to  Mexico's  attitude,  a  refusal  to 
release  the  consular  agent  would  not 
come  as  a  surprise. 

The  American  demand  was  de- 
livered to  the  Mexican  Foreign  Of- 
fice last  Wednesday,  but  as  late  as 
last  Friday,  Jenkins  still  was  held  at 
Puebla  and  so  far  as  the  State  De- 
partment has  been  advised,  he  has 
not  been  released. 

I^ANSING  DOES  NOT  ACT. 
rEXCIiUSrVB  DISPATCH.! 
WASinNGTON,  Nov.  24.  —  The 
State  Department  received  no  infor- 
mation today  as  to  when  an 
answer  migrht  be  expected  from 
Mexico. 

Although  Secretary  of  State  La.n- 
sing  had  admitted  that  today  would 
be  regarded  as  the  end  of  the  rea- 
sonable time  to  be  allowed  Car- 
ranza  to  comply  with  the  American 
demand,  there  was  no  sign  of  the 
administration  fulfilling  its  threat  to 
take  aggressive  action  against  the 
Mexican  government.  If  no  reply 
Is  forthcoming  tomorrow  morning 
the  steps  to  be  taken  to  bring  Car- 
ranza  to  time  will  be  considered  by 
the  Cabinet,  over  which  Secretary 
Lansing  will  preside. 

'At  best  the  stMute  operates  to  c 


^hes  of  the  original  mortgagee 
Ai    ,  r  •        •  J 

j^j  the  means  of  securmg  it,  and 

twd.    The  question  has  not  been 

^^'t  of  authority  in  other  juris- 
rect  .  ,     ^     .  .  , 

jjpj.^case  of  such  forfeitures,  the 

Tl 

gardibility  are  unable  to  make  a 

■.    grantees.    The  capacity  of  a 

stude'rantor.    Infants  and  persons 

prom-es.     It  is  not  essential  that 

g^^gC  date  if  given  is  prima  facie 

strungful  conveyancer  will  in  the 

Wjiby  the  same  name  by  which 

cfainr^^  run  to  George  Johnston, 

the  ahnson,  the  deed  should  run 

nese  inder  the  name   ot   George 
on    N< 


prima  facie  the  identity  of 

GEl  .    ,    ,, 

at  any  person  in  whom  the 

shall  afterwards  from  any 

Tiust,  in  any  conveyance  of 

^  name  by  which  he  or  she 

huahiprehend  that  this  provision 

"^^'^^the  name  of  which  had  been 

yvoroperty.     Certainly  it  would 

*^"^Code  rule.     This  statute  has 
guai 

Diern,  been  construed  by  the  Su- 

ea,r*iat  it  would  be  held  that  the 

''iuld  not  render  the  deed  void, 
me 

omf  name  which  governs  in  law. 
lange  the  rules  of  evidence  only. 
The  statement  as  to  change  of  name  is  but  prima  facie  evidence  of 
the  true  fact. 

One  may  acquire  title  by  the  name  of  "John  Jones"  and  convey 
by  the  name  of  "John  Smith,"  and  if  the  grantee  in  one  deed  be 


23 


COURT  SETS  PRECEDENT  FOR 
LOOSING  JAPS'  GRIP  ON  LAND. 


Nov 


25 


X^ 


^Mt^ 


wise  if  it  appear  from  the  record,  we  will  say,  in  proceedings  where- 
in "A"  was  adjudged  to  be  insane  and  committed,  and  it  appear  from 
the  proceedings  that  he  was  insane  at  the  time  he  made  his  deed 
this  fact  is  enough  to  give  notice  to  any  subsequent  grantee  that 
"A"  has  a  right  to  rescind  upon  restoration  to  capacity.  Again,  if 
the  record  discloses  that  the  deed  was  made  by  "A"  after  commit- 
ment, or  after  the  appointment  of  a  guardian,  any  grantee  must  be 
held  to  have  notice  that  his  deed  was  void  and  "A"  car>  t-^cover  fhp 
land  irrj-:it»c=k*irkiri(1(if*iici(iii**-k1ik-kit'k-k*i('kic'ki(k'k1iiiAiek-k 
If  then!? 
purcha  ; 
any  su  | 
seekin 
and  n 
chase- 
such  '' 
learn 
as  he 
gory 
that  t>^ 
and 
influ' 
such 
thinj 
is  pr 
of  ai* 
such 


to 


LA  Times 

[BY  A.  P.  NIGHT  WIRE.] 

VISALIA,  Nov.  24. — The  practice  of  Japanese  in  Cali- 
fornia who  obtain  land  in  the  name  of  their  children  and  cul- 
tivate and  live  on  that  land  is  a  flagrant  violation  of  the  anti- 
alien  law,  according  to  a  decision  handed  down  here  today  in 
the  Superior  Court  by  Judges  Wallace  and  Allen,  sitting 
en  banc. 

The  decision'  was  the  outcome  of  a  petition  by  J.  Kawa- 
hara,  a  Japanese,  to  be  appointed  guardian  of  his  4-year-old  i 
son.  Two  years  ago  Kawahara  bought  latrd  in  his  son's  ' 
name,  the  decision  said,  ostensibly  for  the  use  and  benefit  of 
the  child.  Desiring  to  place  a  mortgage  on  the  land,  it  be- 
came necessary  that  the  child  have  a  guardian  appointed. 
Kawahara's  application  for  guardianship  was  denied. 

SACRAMENTO.  Nov.  24. — The  decision  today  by  the  Tulare 
Superior  Court  en  banc  ruling  against  use  of  land  by  an  alien  who 
holds  It  In  the  name  of  a  minor,  establishes  an  important  precedent 
and.  If  sustained,  will  be  the  means  of  ousting  many  aliens  from 
land  holdings  In  California,  according  to  State  Senator  Inman. 

Senator  Inman  was  the  author  of  the  resolution  adopted  at  a 
special  legislative  session,  November  1,  asking  Gov.  Stephens  to 
call  another  session  for  Japanese  exclusion  legislation. 

The  practice  of  holding  land  through  guardianship  of  children 
is  general  among  aliens  forbidden  by  law  to  hold  title  in  their  own 
name,  Senator  Inman  said,  and  had  been  sanctioned  by  court  deci- 
sion In  a  Southern  California  case. 


Alier'* 

proh 

aen 

a  lavted 
in  thitu 

Acts  . " 

ae  I ' 

concei,ia 
questitts  ; 
upon  c" '.'. 
an  alie^  \'. 
of  title) 

by  him  is  a  strict  fulfillment  of  the  object  of  the  law.  There  is  no 
penalty  imposed  upon  one  who  conveys  to  him.  If  you  take  a 
mortgage  on  his  land  the  only  risk  you  run  is  in  having  it  paid 
before  maturity  upon  forfeiture  to  the  State.  If  you  foreclose  you 
have  compelled  the  alien  to  comply  with  the  law.  Manifestly  it  was 


^^t.^^.^M>^.^^.^MM^.K^^^*A^.^^^j^^.^^^A^^*¥*¥¥¥-V^^¥¥¥^¥¥¥¥-^M^¥^MF^A^*'^MM^^ 


<_u 


22 


not  the  intent  of  the  legislature  to  impose  loss  upon  its  own  citizens 
as  would  happen  if  the  mortgage  became  void  on  forfeiture.  There 
is  no  means  of  knowing  whether  these  people  with  Chinese  or 
Japanese  names  be  alien  or  not.  If  the  mortgagee  were  obliged  to 
secure  absolute  proof  that  his  mortgagor  was  a  citizen  of  the  United 
States  before  he  could  safely  loan  him  money  one  could  not  safely 
loan  to  any  one.  John  Smith  may  be  a  citizen  of  Japan,  while  Sam 
Sing  may  be  a  native  born  Californian.  Granting  that  the  identity 
and  citizenship  of  the  mortgagor  be  established  to  the  satisfaction 
of  the  mortgagee,  successive  assignees  of  the  original  mortgagee 
might  be  without  such  information  or  the  means  of  securing  it,  and 
the  mortgagee  might  have  been  misled.  The  question  has  not  been 
decided  by  our  courts,  but  in  the  light  of  authority  in  other  juris- 
dictions, I  am  of  the  opinion  that  in  case  of  such  forfeitures,  the 
mortgage  would  follow  the  land. 

Persons  who  from  some  legal  disability  are  unable  to  make  a 
valid  deed  yet  frequently  may  take  as  grantees.  The  capacity  of  a 
grantee  is  less  restricted  than  that  of  a  grantor.  Infants  and  persons 
non  compos  mentis  may  take  as  grantees.  It  is  not  essential  that 
a  deed  be  dated  to  give  it  validity  but  the  date  if  given  is  prima  facie 
evidence  of  the  date  of  delivery.  A  careful  conveyancer  will  in  the 
drafting  of  a  deed  designate  the  grantor  by  the  same  name  by  which 
he  acquired  title.  For  example,  if  the  deed  run  to  George  Johnston, 
and  the  true  name  of  the  grantee  be  Johnson,  the  deed  should  run 
"George  Johnson  who  acquired  title  under  the  name  of  George 
Johnston"  or  similar  words  to  establish  prima  facie  the  identity  of 
party. 

It  is  provided  by  the  Civil  Code,  that  any  person  in  whom  the 
title  to  real  estate  may  be  vested  who  shall  afterwards  from  any 
cause  have  his  or  her  name  changed,  must,  in  any  conveyance  of 
said  real  estate  so  held,  set  forth  the  name  by  which  he  or  she 
derived  title  to  said  real  estate.  I  apprehend  that  this  provision 
would  be  held  to  include  a  corporation  the  name  of  which  had  been 
changed  after  the  acquisition  of  real  property.  Certainly  it  would 
be  good  conveyancing  to  follow  the  Code  rule.  This  statute  has 
not,  so  far  as  I  have  been  able  to  learn,  been  construed  by  the  Su- 
preme Court.  I  am  of  the  opinion  that  it  would  be  held  that  the 
failure  to  so  describe  the  grantee  would  not  render  the  deed  void, 
for  it  is  the  identity  of  person  not  of  name  which  governs  in  law. 
At  best  the  statute  operates  to  change  the  rules  of  evidence  only. 
The  statement  as  to  change  of  name  is  but  prima  facie  evidence  of 
the  true  fact. 

One  may  acquire  title  by  the  name  of  "John  Jones"  and  convey 
by  the  name  of  "John  Smith,"  and  if  the  grantee  in  one  deed  be 

23 


identical  with  the  grantor  in  the  other  the  deed  is  good.  The  bur- 
den of  proof  in  case  of  attack  is  upon  the  person  claiming  under 
the  deed  to  prove  identity  of  person.  Were  the  deed  to  follow  the 
Code  rule  and  describe  the  grantor  in  the  latter  deed  as  John  Smith 
who  acquired  title  as  John  Jones,  the  burden  of  proof  would  be 
upon  the  person  attacking  the  conveyance  to  show  that  John  Jones 
was  not  the  identical  person  who  executes  the  deed  as  John  Smith. 

If  the  grantee  be  single,  he  or  she  should  be  so  described  for 
prima  facie,  this  establishes  the  status  when  he  or  she  comes  to 
convey.  If  "Sarah  Scott"  be  described  in  a  conveyance  to  her  as  &' 
spinster,  or  a  single  woman,  and  she  afterward  convey  as  "Sarah 
Robbins,"  married,  the  record  on  its  face  shows  the  property  to  be 
her  separate  estate.  One  dealing  with  the  property  is  entitled  to 
rely  upon  these  recitals  and  a  careful  conveyancer  will  insert  them. 
The  recital  that  the  property  is  conveyed  to  a  grantee  as  his  or  her 
separate  estate  is  not  conclusive.  It  simply  shifts  the  burden  of 
proof  in  case  of  attack.  Yet  if  it  be  a  fact  that  the  consideration  is 
paid  we  will  say  by  a  married  woman  with  money  received  by 
devise  from  her  father  it  is  a  good  rule,  and  certainly  excellent 
practice  to  recite  the  facts  that  they  may  be  traced  if  necessity 
demands. 

Where  the  parties  act  in  a  trust  relation  as  trustee,  guardians, 
executors,  administrators  or  the  like  it  should  clearly  appear  that 
the  conveyance  is  made  to  them,  or  by  them  as  such.  Otherwise 
it  will  be  held  that  the  deed  is  personal.  It  is  often  desired  in  the 
administration  of  estates  to  clear  titles  and  to  take  deeds  for  that 
purpose.  We  will  take  an  instance  where  the  deceased  in  his  life- 
time has  executed  a  contract  of  sale.  After  his  death  it  is  desired 
to  take  a  deed  from  his  vendee  who  wishes  to  surrender.  It  is  a 
common  mistake  to  make  the  deed  to  the  "estate  of"  the  deceased. 
Such  a  deed  passes  no  title,  for  there  is  no  such  thing  as  an  "estate" 
of  a  deceased  person  as  a  legal  entity.  The  deed  should  run  to 
"John  Doe,"  we  will  say,  "as  the  administrator  or  executor  of  the 
estate  of  James  Roe  deceased,  subject  to  the  administration  of  his 
estate,"  or  "to  the  heirs  or  devisees  of  James  Roe,  deceased,  subject 
to  the  administration  of  his  estate." 

It  must  be  remembered  that  upon  the  death  of  the  ancestor  the 
title  to  all  property  owned  by  him  at  the  time  of  his  death  vests 
instantly  in  his  heirs  or  devisees,  subject  to  administration.  The 
object  of  administration  being  to  judicially  determine  the  identity 
of  the  heirs  or  devisees,  and  to  save  the  rights  of  creditors  of  the 
deceased.  The  administrator  has  by  virtue  of  the  laws  of  California 
a  qualified  estate  sufficient  to  enable  him  to  maintain  or  defend 
actions  in  relation  to  the  property,  but  his  title  is  transitory,  and 

24 


when  distribution  is  made,  passes  automatically  to  the  heir,  or 
speaking  in  a  stricter  sense,  dies  when  the  administration  is  com- 
plete. A  devise  of  all  title  may  be  made  to  an  executor,  but  to  all 
intents  and  purposes  his  title  is  that  of  an  administrator.  It  is  not 
required  that  he  convey  over  to  the  devisee  when  the  administration 
is  complete. 

In  cases  where  it  is  desired  to  create  a  joint  tenancy  in  the 
grantees  the  words  of  grant  should  be  to  them  "as  joint  tenants 
with  the  right  of  survivorship."  It  is  not  necessary  to  add^  "and 
not  as  tenants  in  common,"  for  the  first  designation  precludes_the 
latter.  The  habendum  should  follow  this  exactly  if  used.  It  is  not 
"pTgpeFTo  say  "to  have  and  to  hold  totheir  heirs"  for  the  estate  does 


riot  pass  to~heirs._  It  is  better  practice  to  exclude  the  habendum, 
Hutif  used,  care  should  be  taken  that  it  is  not  repugnant  to  the    / 
grantingclause.  ' 

In  cases  where  the  identity  of  the  grantee  cannot  be  established 
the  deed  is  void.  Thus  a  deed  running  to  the  citizens  of  Inglewood 
is  void,  for  the  identity  of  the  persons  intended  as  grantees  could 
never  be  established.  A  conveyance  to  the  "Republican  Party" 
would  be  void  on  the  same  grounds.  A  deed  to  John  Jones  or 
Mary  Jones  is  void,  for  it  does  not  appear  which  person  was 
intended  as  the  grantee. 

It  is  not  necessary  to  state  the  amount  of  consideration  in  a 
deed.  A  written  instrument  presumes  a  consideration,  yet  it  is  good 
conveyancing  in  cases  of  gifts  by  deed  to  state  the  fact  that  the 
conveyance  is  by  way  of  gift,  that  it  may  affirmatively  appear  that 
the  property  conveyed  is  vested  in  the  grantee  as  separate  estate. 
It  is  not  requisite  that  the  consideration  be  adequate,  or,  in  cases  of 
gift,  valuable.  Love  and  affection  is  a  good  consideration,  as  is 
better  maintenance  and  support. 

It  must  be  remembered  that  a  deed  is  always  assailable  if  the 
property  remains  in  the  grantee  and  the  consideration  be  inade- 
quate, or  there  be  fraud  of  any  nature  coloring  the  transaction 
between  the  grantor  and  the  grantee.  When  the  property  has 
passed  from  the  grantee  under  a  fraudulent  deed  to  an  innocent 
purchaser  for  value,  it  is  clear  of  any  taint  in  his  hands.  The  reason 
for  this  is  obvious.  It  is  not  possible  that  one  purchasing  lands 
could  know  all  the  secret  intentions  and  motives  of  the  parties  who 
preceded  him  in  the  title,  nor  of  the  actual  circumstances  surround- 
ing the  various  transactions.  There  could  never  be  safety  in  the 
ownership  of  real  property  if  every  purchaser  should  be  held  to 
have  knowledge  of  every  circumstance  and  fact  which  governed 
every  transaction  relating  to  it.  Hence  the  law  says  that  one  who 
has    not    actual    notice    of    infirmities    or    that    constructive    notice 

25 


which  is  imputed  to  him  by  the  public  records  is  protected  when  he 
has  in  good  faith  parted  with  value  in  exchange  for  the  land. 

The  subjects  of  descriptions  of  the  property  conveyed  and  of 
conditions  and  covenants  in  deeds  will  be  considered  under  separate 
heads.    We  will  pass  to  the  other  formal  parts  of  the  deed. 

Under  the  California  system  of  conveyancing  the  habendum  or 
the  "to  have  and  to  hold"  clause  has  no  place  in  a  deed.  It  should 
not  be  used  at  all,  as  many  times  it  leads  to  confusion.  The  simple 
words  "grant"  or  "quit  claim"  are  sufficient.  In  using  forms 
containing  this  clause  care  should  be  exercised  to  insert  no  words 
repugnant  to  the  granting  clause.  The  safest  course  is  to  exclude 
the  habendum  clause  altogether.  It  is  unnecessary  and  dangerous. 
If  it  be  desired  to  disclose  the  sex  of  the  grantee,  and  it  is  good 
practice  so  to  do,  let  the  deed  run  to  the  grantee,  his  or  her  heirs. 

The  signature  to  the  deed  should  be  identical  with  the  descrip- 
tion of  the  grantor,  yet  this  is  not  vitally  important.  Where  the 
deed  describes  the  grantor  as  "George  Jones,"  the  signature  may  be 
"Geo.  Jones"  or  "G.  Jones,"  so  long  as  the  identity  of  the  party  is 
otherwise  sufficiently  established.  The  signature  may  be  written 
by  one  other  than  the  grantor  if  it  be  done  at  his  instance  and 
request.  A  signature  by  mark  or  any  character  is  sufficient.  It  is 
provided  by  Sec.  14  of  the  Civil  Code  that  signature  or  subscription 
includes  mark  when  the  person  executing  cannot  write ;  his  name 
being  written  near  it  by  a  person  who  writes  his  own  name  as  a 
witness ;  provided,  that  when  a  signature  is  by  mark,  it  must,  in 
order  that  the  same  may  be  acknowledged,  or  may  serve  as  the 
signature  to  any  sworn  statement,  be  witnessed  by  two  persons 
who  must  subscribe  their  own  names  as  witnesses  thereto.  I  rec- 
ommend the  following  form  for  use  in  such  cases. 

"John   Smith,   being   unable   to   write,   I   have   subscribed   his 
name  hereto,  and  the  said  John  Smith  hereto  affixed  his  mark  in 
the  presence  of  the  witnesses  who  subscribe  their  names  below. 
(Signed)  Abel  Jones. 
Witnesses : 

William  Adams. 
Abel  Jones. 
A  deed  not  executed  with  such  formalities  is  not  void,  but  such 
attestation  is  prima  facie  evidence  of  the  fact  of  execution.  Where 
the  deed  is  by  a  corporation  such  a  signature  as  "William  Evans, 
President,  etc."  is  insufficient.  It  must  be  in  the  name  of  the  cor- 
poration by  William  Evans,  President,  etc.  It  is  essential  that  the 
corporate  seal  be  attached  if  the  corporation  has  adopted  a  seal. 
If  they  have  not  done  so  the  instrument  should  state  that  fact. 
The  execution  by  an  attorney  in  fact  must  be  in  the  name  of  the 

26 


principal,  otherwise  it  is  the  personal  deed  of  the  attorney.  If 
there  are  two  grantors  in  a  deed,  one  of  whom  acts  as  attorney  in 
fact  for  the  other,  such  attorney  must  sign  his  name  twice ;  once  as 
attorney  in  fact  for  the  grantor  for  whom  he  acts,  and  once  for 
himself.  It  is  not  necessary  under  California  law  to  afhx  a  private 
seal,  nor  are  witnesses  necessary,  except  in  cases  where  the  grantor 
signs  by  mark.  It  is  often  desirable,  however,  to  secure  a  witness, 
for  proof  of  the  execution  may  be  made  by  a  subscribing  witness, 
and  this  is  convenient  many  times  when  it  is  difficult  to  secure  the 
acknowledgement  of  the  grantor. 

We  now  come  to  consider  the  subject  of  delivery  of  a  deed;  a 
very  important  subject  as  you  shall  see.  Before  a  deed  can  operate 
at  all  it  must  be  delivered.  This  delivery  is  absolutely  essential 
to  a  transfer  of  the  land.  Although  the  deed  in  all  other  respects 
has  been  properly  executed,  it  is  a  nullity  unless  a  legal  delivery  is 
made.  It  is  not  essential  that  an  actual  physical  transfer  of  the 
instrument  be  made.  As  said  by  Devlin,  "The  act  of  delivery  is  not 
necessarily  a  transfer  of  the  possession  of  the  instrument  to  the 
grantee  and  an  acceptance  by  him,  but  it  is  the  act  of  the  grantor 
indicated  either  by  acts  or  w^ords,  or  both,  which  shows  an  inten- 
tion on  his  part  to  perfect  the  transaction  by  a  surrender  of  the 
instrument  to  the  grantee,  or  some  third  person  for  his  use  and 
benefit.  The  whole  object  of  a  delivery  is  to  indicate  an  intent 
upon  the  part  of  the  grantor  to  give  effect  to  the  instrument.  It  is 
not  necessary  to  pursue  any  particular  course  to  effect  a  valid  deliv- 
ery of  a  deed.  It  is  sufficient  that  a  grantor  intends  when  executing 
a  deed  to  be  understood  as  delivering  it.  Hence  a  grantor  is  not 
permitted  to  say  that  a  deed  is  inoperative  for  want  of  a  formal 
delivery  where  he  has  induced  the  grantee  to  believe  in  its  execution 
and  allows  the  grantee  to  act  under  that  belief." 

It  is  a  question  purely  of  intent  to  deliver  and  no  manual  deliv- 
ery is  operative  unless  accompanied  by  an  intent  to  deliver.  It  is  a 
favorite  custom  w^here  a  husband  and  wife  own  a  certain  piece  of 
land  as  tenants  in,  common  to  execute  deeds  simultaneously,  one  to 
the  other,  with  the  understanding  that  upon  the  death  of  either 
grantor,  his  or  her  deed  shall  be  recorded  to  vest  record  title  in  the 
surviving  grantee.  This  device  is  futile,  for  there  is  no  valid  deliv- 
ery. There  is  no  intent  to  deliver  presently  and  unconditionally 
and  such  deeds  are  void  as  against  an  attacking  heir  or  creditor. 

A  valid  delivery  of  a  deed  may  be  made  to  take  effect  in  pos- 
session after  the  death  of  a  grantor,  but  there  is  no  such  thing  as  an 
estate  to  begin  in  the  future.  The  possession  and  enjoyment  may 
be  postponed,  but  a  present  interest  must  pass.  Such  deliveries 
must  be  absolute  and  unconditional  with  a  bona  fide  intent  to  pass 

27 


the  title  at  once,  but  as  said,  the  possession  may  be  postponed. 
Such  a  deed  may  be  delivered  to  a  third  person  to  be  delivered  to 
the  grantee  upon  the  death  of  the  grantor,  but  the  original  delivery 
must  be  absolute  and  unconditional.  Such  a  deed  has  the  effect  to 
pass  a  present  title  to  the  grantee  to  be  possessed  by  him  on  the 
death  of  his  grantor,  and  there  is  left  a  life  estate  in  the  grantor. 
Any  conditions  attached  to  the  first  delivery  which  imply  a  want  of 
intent  to  make  absolute  delivery  are  sufficient  to  render  the  deed 
void.  For  example,  "A"  executes  a  deed  to  "B"  and  delivers  it  to 
"C"  with  instructions  to  deliver  at  a  certain  date  or  upon  the  death 
of  "A"  "provided  I  do  not  sooner  demand  return  of  the  deed"  or 
"provided  I  do  not  sell  the  land  in  the  meantime,"  or  "provided  "B" 
'lives"  or  the  like.  Here  is  an  implication  that  "A"  did  not  intend  an 
^absolute  and  unconditional  delivery  and  no  title  passes  by  the  deed. 
The  subject  of  delivery  to  third  persons  for  the  benefit  of  the 
grantee  will  be  more  fully  discussed  under  the  head  of  "Escrows." 
I  wish  to  impress  this  fact  however  upon  your  minds  at  this  time 
that  no  deed  is  operative  which  is  not  legally  delivered,  and  this,  in 
short,  means  a  full  and  absolute  intent  upon  the  part  of  the  grantor 
that  his  deed  shall  be  operative.  A  thousand  different  cases  arise  in 
which  circumstances  dift'er.  The  test  is  in  every  case  "did  the 
grantor  intend  to  deliver,  and  did  he  surrender  dominion  over  the 
instrument?" 

Deeds  are  always  effective  against  the  parties  to  them  and  all 
having  actual  notice  of  them.  To  impart  constructive  notice  of 
their  contents  the  law  requires  that  they  be  acknowledged  in  statu- 
tory form  and  recorded.  They  thus  impart  knowledge,  if  they  be 
properly  acknowledged  and  recorded,  whether  one  subsequently 
dealing  with  the  property  ever  sees  them  or  not.  Possession  is  the 
highest  form  of  notice  and  one  dealing  with  property  must  always 
enquire  into  the  rights  of  parties  in  possession,  whether  the  record 
discloses  any  interest,  or  is  silent.  One  in  possession  either  by 
himself  or  tenant  is  not  required  to  record  his  deed  or  contract  of 
purchase.  His  physical  possession  is  the  best  notice  to  the  world 
of  his  right  to  occupy  the  land. 

Deeds  not  properly  executed  or  acknowledged  do  not  impart 
notice  to  one  who  has  no  actual  knowledge  of  them.  Acts  are 
passed  from  time  to  time  to  cure  such  defects  in  the  record.  Thus 
they  provide  that  in  cases  where  instruments  which,  by  reason  of 
defect  in  execution  or  acknowledgement,  or  which  were  not  ac- 
knowledged at  all,  have  been  recorded  in  the  proper  books  of  record 
before  a  certain  date,  shall  be  deemed  to  impart  knowledge  of  their 
contents  after  that  date,  irrespective  of  the  defect.  These  acts 
always   save  the  rights  of  third   parties,  however.     Thus   if  "A" 

28 


convey  to  "B,"  and  there  is  a  defect  in  execution  or  acknowledge- 
ment, and  the  deed  be  recorded  in  the  proper  book  of  record,  and 
before  the  taking  effect  of  the  curative  act,  ^'A"  convey  the  same 
land  to  "C,"  who  has  no  actual  knowledge  of  the  prior  conveyance 
to  ''B,"  the  curative  act  does  not  operate  to  validate  the  deed  to 
"B"  as  against  "C."  If  "C,"  in  examining  the  record,  finds  the  deed 
to  "B,"  and  ascertains  that  it  is  not  entitled  to  record,  he  cannot 
rely  upon  this  and  deal  with  "A,"  claiming  to  be  an  innocent  pur- 
chaser. His  actual  knowledge  of  the  attempted  conveyance  to 
"B"  thus  gained  is  sufficient  to  put  him  upon  enquiry,  as  much  so 
as  if  the  deed  to  "B"  had  been  entitled  to  record.  Actual  know- 
ledge of  any  such  conveyance  derived  from  any  source  is  enough 
to  bind  "C"  to  all  he  might  have  learned  had  he  pursued  his  enquiry. 

As  the  forms  of  acknowledgment  are  frequently  changed  it  is 
enough  to  say  that  these  forms  as  prescribed  by  the  codes  must  be 
constantly  scanned  in  the  preparations  of  deeds  and  in  their  exam- 
ination. Remember  also  that  each  state  has  its  own  requirements. 
In  certifying  acknowledgment  of  deeds  to  be  used  in  another  state, 
investigation  should  be  made  of  the  laws  of  the  particular  states 
that  parties  may  not  suffer  loss  or  inconvenience. 

Another  point  which  will  be  dealt  with  more  largely  when  we 
reach  the  subject  of  trusts.  It  is  a  common  practice  to  take  a  deed 
to  a  grantee  as  "trustee"  without  further  designation  and  without 
attempting  to  disclose  the  object  of  the  trust.  The  question  arises 
as  to  what  notice  is  imparted  to  a  purchaser  from  the  person  so 
described  by  such  nomenclature,  and  what  enquiry  should  be  made 
as  to  possible  interests  of  other  persons.  Very  frequently  deeds 
a^re  so  taken  under  the  mistaken  impression  that  the  property  is 
thus  protected  from  creditors.  In  such  cases,  the  word  "trustee" 
may  be  considered  merely  as  descriptive,  a  sort  of  identification  of 
the  grantee.  He  may  be  trustee  of  a  church  or  the  like.  Although 
it  is  not  likely  that  he  would  so  describe  himself.  Such  a  deed 
wherein  the  word  may  be  considered  only  as  descriptive,  the  full, 
title,  legal  'dml  equitable^  is  vested  in  the  grantee.  It  may  be  that 
he  holds  title  as  trustee  for  another,  in  which  case  it  is  a  resulting 
trust,  and  while  he  is  in  fact  a  trustee,  he  has  no  powers  except  to 
convey  to  the  one  who  has  paid  the  consideration.  He  holds  the 
bare  legal  title  only,  the  one  who  paid  the  consideration  is  the 
equitable  owner.  One  who  takes  a  deed  from  the  trustee  gains 
but  the  same  bare  legal  title  and  holds  for  the  equitable  owner. 
It  may  be  disclosed  that  there  was  an  express  trust  created  by 
another  instrument  in  writing  contemporaneous  with  the  deed,  and 
if  so,  the  grantee's  powers  are  measured  by  that  instrument,  and  an 
intending  purchaser  or  encumbrancer  must  inspect  that  document. i 

29 


In  cases  where  such  deeds  occur  in  a  chain  of  title  and  the  title  has 
passed  from  the  trustee  long  since,  and  all  parties  appear  to  have 
acquiesced  in  the  transaction,  and  there  be  nothing  indicative  of 
a  possible  trust,  1  judge  it  a  sale  rule  to  ignore  the  term  and  assurne 
that  the  full  title  passed.  Not  so,  however,  when  the  transaction 
is  a  recent  one,  or  where  such  a  dee^Lia.^reseiv£e^  You  are  not 
safe  in~TgnoriiT^Lhe  vvuid  'trustee"  when  the  person  who  offers  to 
sell  to  you  exhibits  a  title  in  himself  as  trustee.  You  are  distinctly- 
put  upon  enquiry  as  to  possible  rights  of  others,  and  if  you  do  not 
investigate,  you  purchase  at  your  peril.  Do  not  make  or  take  such 
deeds.    They  but  lead  to  confusion  and  doubt. 

Remember  these  points :     Do  not  describe  yourself   in  youj; 

>deed  as  trustee_unless  you  be  such  under  a  valid  express  trust. 

)Do  not  describe  your  grantee  as  trustee,  unless  he  be  sudE~m  fact, 

md  then  define  thejrust     If  he  insist,  persuadFlnm  fromit  by 

)ointing  out  the  difificiilties  he  mjy  experience  when  he  comes  to 

Jsell  or  mortgage.'""  . 

Remember  in  buying  or  in  loaning  money,  you  must  know  that 
the  one  with  whom  you  are  dealing  is  of  full  age  and  capable  of 
contracting.  If  the  property  be  homestead  you  must  know  that 
the  parties  are  in  fact  husband  and  wife.  You  must  know  that 
the  party  from  whom  you  are  buying  is  the  identical  person  de- 
scribed in  the  deed  under  which  he  claims.  These  things  are  not 
disclosed  by  the  records  and  hence  are  not  in  the  ken  of  the  title 
companies.  You  cannot  rely  upon  your  guaranty  of  title  as  to  these 
things.  You  may  rely  upon  your  guaranty  up  to  the  time  your 
dealings  begin  with  individuals. 

Always  and  in  every  instance  require  an  examination  of  the 
title. for  all  matters  of  record  are  notice  to  you  whether  you  know 
them  or  not. 


30 


III. 

Covenants,  Conditions  and  Restrictions 

in  Deeds 

This  subject  is  a  very  wide  one,  and  I  cannot  hope  to  do  more 
than  treat  of  a  few  of  its  more  salient  features.  I  shall  aim  to 
discuss  the  important  points  only  from  the  viewpoint  of  a  grantee 
in  a  deed,  or  of  one  who  examines  the  deed  for  him. 

The  law  imposes  upon  the  grantor  certain  liabilities  by  his  very 
act  of  transfer.  These  liabilities  are  fixed  by  Statute  in  this  State. 
Section  1113  of  the  Civil  Code  reads: 

"From  the  use  of  the  word  'grant'  in  any  conveyance  by  which 
an  estate  of  inheritance  or  fee  simple  is  to  be  passed,  the  following 
covenants  and  none  other,  on  the  part  of  the  grantor  for  himself  and 
his  heirs  to  the  grantee,  his  heirs  and  assigns  are  implied  unless 
restrained  by  express  terms  contained  in  such  conveyance. 

"1.  That  previous  to  the  time  of  the  execution  of  such  convey- 
ance the  grantor  has  not  conveyed  the  same  estate,  or  any  right, 
title  or  interest  therein  to  any  person  other  than  the  grantee ; 

"2.  That  such  estate  is  at  the  time  of  the  execution  of  such 
conveyance  free  from  encumbrances  done,  made  or  suffered  by 
the  grantor  or  any  person  claiming  under  him.  Such  covenants 
may  be  sued  upon  in  the  same  manner  as  if  they  had  been  expressly 
inserted  in  the  conveyance." 

These  implied  covenants  may,  of  course,  be  nullified  by  proper 
recitals  in  the  conveyances,  and  any  further  covenants  as  to  general 
warranty  as  to  all  persons  or  claims  of  all  persons,  and  against 
all  encumbrances  at  any  time,  whether  made  or  suffered  by  the 
grantor,  may  be  inserted  and  be  binding  upon  the  grantor  and  his 
heirs.  As  all  of  such  covenants  do  not  bind  the  land  but  create  a 
personal  liability  only,  it  is  important  for  one  dealing  with  the 
land  to  know  what  these  covenants  stand  for  and  mean. 

It  will  be  observed  that  under  the  form  of  Grant  Deed  in 
general  use  in  California  there  is  no  covenant  of  warranty  on  the 
part  of  the  grantor  that  he  is  the  owner  of  the  property.  He  only 
covenants  by  the  word  "grant"  that  he  has  not  conveyed  the  same 
property  or  any  right,  title  or  interest  therein  previous  to  his  con- 
veyance to  any  person  other  than  the  grantee  in  his  deed.  This  and 
the  covenant  against  encumbrances  are  personal  covenants  and  may 

31 


be  sued  upon  by  the  grantee  or  his  heirs.  It  would  appear,  therefore, 
that  one  may  make  a  deed  of  grant  who  is  not  the  owner  of  the 
property,  and  the  law  does  not  impose  upon  him  any  liability  for 
warranty  of  title.  Again,  it  must  be  strictly  observed  that  his 
implied  warranty  under  the  Statute  by  such  a  deed  applies  only  to 
such  encumbrances  or  liens  made  or  suffered  by  him.  His  warranty 
does  not  extend  to  any  lien  or  encumbrance  which  may  have  been 
made  or  suffered  before  he  acquired  the  title.  Thus,  if  "A"  acquire 
title  from  "B"  in  May  of  a  certain  year,  the  State  and  County  taxes 
which  are  declared  by  law  a  lien  upon  the  lands  from  and  after  the 
first  Monday  in  March  are  not  made  or  suffered  by  "A,"  for  he  did 
not  own  the  title  on  the  first  Monday  of  March.  These  taxes 
subsequently  are  levied.  This  has  no  bearing  upon  "A's"  liability 
for  the  taxes  were  a  lien  before  he  acquired  the  title ;  therefore, 
when  "A"  deeds  to  "B"  we  will  say  in  September  of  the  same  year, 
he  is  not  liable  under  his  warranty  for  those  taxes.  A  mortgage  is 
made  upon  the  premises  by  "A's"  predecessor  in  interest.  He  con- 
veys the  title  to  "B"  and  makes  no  mention  of  this  encumbrance. 
He  is  not  liable  upon  his  warranty  for  the  encumbrance  was  not 
made  or  suffered  by  him. 

All  this  leads  to  this  statement,  that  in  dealing  with  property 
the  purchaser  is  not  entitled  in  law  to  rely  upon  the  deed  of  his 
grantor.  He  must,  if  he  will  be  protected,  cause  an  examination  to 
be  made  of  the  title  to  ascertain  whether  or  not  his  grantor  is  in 
fact  the  owner  of  the  property,  and  whether,  as  a  matter  of  fact  it 
be  subject  to  lien  or  incumbrance ;  otherwise  he  deals  at  his  peril, 
for  the  law  does  not  impose  upon  the  grantor  in  the  absence  of  any 
special  covenants  of  warranty,  a  liability  for  failure  of  title  or  cloud 
of  title  under  the  above  circumstances.  It  will  thus  be  seen  how 
important  it  is  that  an  examination  of  the  title  must  be  made  to 
ascertain  the  true  state  of  facts.  If  an  examination  be  made  and  it 
be  shown  by  the  record  that  "A"  is  the  owner  of  record  and  that 
there  are  no  liens  or  incumbrances  existent,  "A's"  Grant  Deed  is  as 
of  high  value  as  if  he  had  in  terms  warranted  against  every  possible 
defect ;  otherwise,  as  I  have  stated,  any  assurances  made  by  the 
grantor  outside  of  his  deed  are  of  no  avail  against  him  if  his  title  be 
in  fact  subject  to  matters  for  which  the  law  does  not  hold  him 
personally  responsible  under  his  warranty. 

As  I  have  stated  before,  these  Statutory  covenants  that  land  is 
free  from  encumbrance,  are  personal  covenants  and  do  not  run  with 
the  land.  The  term  "encumbrances"  includes  taxes,  assessments, 
and  all  liens  upon  real  property,  but  these  are  not  the  only  encum- 
brances to  be  considered.  While  they  include  such  matters,  there 
are  other  matters  which  may  become  encumbrances;  for  instance, 

32 


is  an  encumbrance  upon  the  land  ;  likewise  a  clam,  a  foot  path  or  any 
right  lodging  in  a  third  person.  Building  restrictions  or  other  cove- 
nants as  to  occupancy  or  use  are  encumbrances,  and  one  may  refuse 
a  deed  where  his  contract  calls  for  the  delivery  of  a  deed  free  and 
clear  of  encumbrances  if  any  such  matters  appear  in  the  chain  of 
title.  A  lien  is  a  charge  imposed  in  some  mode  (other  than  by  a 
transfer  in  trust)  upon  specific  property  by  which  it  is  made 
security  for  the  performance  of  an  act.  It  must  be  borne  in  mind 
that  a  conveyance  in  trust  does  not  create  a  lien.  It  passes  a  title. 
This  will  be  further  distinguished  in  our  discussion  of  Mortgages 
and  Trust  Deeds. 

Devlin  in  defining  an  encumbrance  says : 

"It  is  sometimes  extremely  difficult  to  determine  whether  or 
not  a  particular  right  in  another  is  an  encumbrance  within  the 
meaning  of  the  covenant  against  encumbrances.  This  difficulty 
arises  from  the  fact  that  the  word  'encumbrance'  does  not  admit  of 
a  eeneral  and  at  the  same  time  an  accurate  definition."  Thus  a 
lease  outstanding  might  add  greatly  to  the  value  of  the  property 
from  an  investment  standpoint,  but  if  the  purchaser  desired  imme- 
diate possession,  the  existence  of  the  lease  might  detract  from  its 
market  value,  and  the  lease  might  under  such  circumstances  be 
deemed  an  encumbrance." 

Bouvier  defines  an  encumbrance  as :  "Any  right  to  or  interest 
in  land  which  may  subsist  in  third  persons  to  the  diminution  of  the 
value  of  the  estate  of  the  tenant,  but  consistently  with  the  passage 
of  the  fee."  In  other  words,  if  the  third  person  had  any  vested 
right  or  title  in  the  land,  it  would  not  be  considered  an  encumbrance 
but  a  title,  but  if  a  third  person  is  possessed  of  some  right  or  interest 
in  the  land  which  does  not  prevent  a  passage  of  a  full  title  in  fee 
simple,  his  right  or  interest  is  an  encumbrance.  The  circumstances 
of  each  particular  case  must  govern,  and  no  general  rule  can  be 
laid  down  to  govern  absolutely  in  such  cases. 

Covenants  are  of  two  characters.  Covenants  running  with  the 
land,  which  perpetually  bind  the  land  to  their  observance,  and 
personal  covenants  which  are  enforceable  only  as  between  the 
parties  and  not  as  to  the  land.  What  are  covenants  running  with 
the  land?  The  simple  assertion  that  certain  covenants  expressed 
shall  run  with  the  land  is  not  sufficient  unless  the  subject  matter 
treated  of  is  such  as  the  law  allows  to  be  so  dealt  with. 

The  only  covenants  w^hich  run  with  the  land  in  this  State  are 
those  specified  in  the  Code  (Section  1461  Civil  Code.)  Section  1460 
of  the  Civil  Code  is  as  follows : 

"Certain  covenants  contained  in  grants  of  estate  in  real  prop- 
erty are  appurtenant  to  such  estates  and  pass  with  them,  so  as  to 

33 


V 


bind  the  assigns  of  the  covenantor  and  to  vest  in  the  assigns  of  the 
covenantee,  in  the  same  manner  as  if  they  had  personally  entered 
into  them.    Such  covenants  are  said  to  run  with  the  land." 

Section  1462  of  the  Civil  Code  reads : 

"Every  covenant  contained  in  a  grant  of  an  estate  in  real 
property,  which  is  made  for  the  direct  benefit  of  the  property  or 
some  part  of  it  then  in  existence,  runs  with  the  land."  But  the 
property  to  be  benefited  is  the  estate  granted  and  this  must  be  borne 
in  mind.  These  so  termed  real  covenants  run  with  the  land,  inuring 
to  the  benefit  of  or  becoming  binding  upon  subsequent  grantees. 
Personal  covenants  are  binding  only  upon  the  personal  covenantor 
and  his  personal  representatives.  A  real  covenant,  meaning  by  that 
a  covenant  which  runs  with  the  land,  must  have  relation  to  the 
interest  of  estate  granted,  and  the  act  to  be  done  must  concern  the 
interest  created  or  conveyed,  and  by  our  Statutes  must  be  a  benefit 
to  the  land  conveyed,  thus  a  covenant  restricting  the  use  of  the  land 
is  not  a  real  covenant.  It  must  be  borne  in  mind,  however,  that  a 
personal  covenant  will  be  enforced  by  a  Court  of  Equity  against  a 
subsequent  grantee  with  notice  of  the  covenant,  but  this  is  only  in 
particular  cases,  as  we  shall  presently  see.  To  create  a  covenant 
running  with  the  land,  there  must  be  a  privity  of  estate  or  mutuality 
of  benefit ;  that  is  to  say,  the  parties  must  be  in  such  a  relation,  one 
to  the  other,  that  each  is  under  some  obligation  to  the  other,  or, 
that  each  is  to  receive  some  benefit  from  the  covenant.  And  it  has 
been  held  in  this  State  that  a  subsequent  grantee  is  not  bound  to 
look  beyond  the  deed  containing  the  covenant  for  evidence  of  this. 

In  Los  Angeles,  etc.,  vs.  Muir,  (136  Cal.  36)  the  Court  lays 
down  this  rule :  "In  the  absence  of  any  words  in  the  deed  or  any 
reference  to  a  plan  showing  a  general  scheme  of  improvement,  the 
grantee  will  take  without  notice,  express  or  constructive,  that  the 
restriction  inserted  in  the  deed  was  for  the  benefit  of  the  adjoining 
estate."  But  as  I  shall  show  later,  this  case  cannot  be  taken  alone 
as  authority.  There  are  other  elements  entering  into  a  logical  dis- 
cussion of  this  which  were  not  in  the  purview  of  the  Court.  This 
rule  is  again  laid  down  in  Berryman  vs.  Hotel  Savoy  Co.,  (160  Cal. 
569.) 

In  a  deed  from  Kinney  and  Dudley,  it  was  covenanted  that  any 
building  erected  on  the  granted  premises  should  not  be  nearer  than 
12  feet  from  a  certain  line.  Subsequently  Kinney  and  Dudley  with 
the  obvious  purpose  of  clearing  the  title,  quit-claimed  to  the  then 
owners  any  interest  they  had  for  the  purpose  of  removing  the 
restriction.  A  grantee  from  Kinney  and  Dudley  owning  the  adjoin- 
ing lot  sought  to  enjoin  a  violation  of  the  agreement  on  the  ground 
thaj  the  restriction jwas  createdjor  the  benefit  of  the_landsj>j.i£ijli 


ney  and  Dudley,  and  that  this  benefit  inured  to  every  other  grantee ; 
that  the  covenant  created  reciprocal  obligations  enforceable  in  equity 
either  as  covenants  that  run  with  the  land  or  as  personal  covenants 
with  which  a  Court  of  Equity  will  compel  compliance  by  persons 
taking  the  respective  parcels  with  due  notice  of  the  mutual  agree- 
ments. This  contention  was  not  sustained,  the  Court  pointing  out 
that  there  was  no  mention  of  any  other  property  of  the  grantors 
in  their  deeds;  nothing  in  the  deeds  to  show  that  they  had  any 
interest  in  any  property  other  than  that  mentioned  in  the  deed. 
The  Court  said:  "Examining  the  words  of  the  covenant  itself,  we 
cannot  see  that  it  creates  an  easement  running  with  plaintiff's  land. 
It  purports  to  be  a  covenant  running  with  the  land  conveyed,  and 
there  is  nothing  in  the  deed  itself  to  show  that  the  grantors  owned 
another  foot  of  land  in  that  vicinity.  Defendant,  therefore,  as  a 
subsequent  purchaser  of  the  land,  could  not  be  charged  with 
knowledge  derived  from  the  record  that  Kinney  and  Dudley  owned 
other  property  to  be  benefited.  (The  bold  type  is  mine).  It  will  be 
observed  that  the  deed  declared  in  terms  that  the  covenant  was  one 
running  with  the  land.  It  was  held  that  it  was  not  such,  even 
though  so  termed.  It  will  also  be  observed  that  the  evidence  ad- 
duced showed  no  knowledge  of  defendant  of  possible  benefits  to 
other  lands  of  covenantee,  that  is  to  say,  Kinney  and  Dudley,  from 
matters  outside  the  record.  A  covenant  running  with  the  land 
cannot  be  created  by  mere  agreement  of  parties,  if  there  be  no 
privity  of  estate  or  mutuality  of  interest.  As  pointed  out,  a  Court 
of  Equity  will  enforce  a  purely  personal  covenant  as  against  subse- 
quent grantees  as  in  the  case  of  real  covenants  if  the  subsequent 
grantee  has  notice  of  the  covenant. 

The  Court  in  the  Muir  case  above  cited  used  this  language: 
"That  there  are  personal  covenants  enforceable  in  equity  against 
the  grantee  of  the  covenantor  (that  is  to  say,  the  grantee  of  the 
first  grantee)  is  conceded ;  but  the  proposition  is  far  from  being 
applicable  in  all  cases,  for  if  it  were,  it  would  result  that  all  purely 
personal  covenants  in  any  manner  relating  to  land  would  have  the 
same  efifect  as  those  which  do  run  with  the  land.  The  vendor  and 
purchaser  of  real  estate  have  the  undoubted  right  to  bestow  such 
benefits  and  impose  such  burdens  and  restrictions  upon  the  land 
sold  and  that  retained  by  the  seller  as  they  see  proper,  unless  some 
wrong  or  injury  thereby  result  to  third  parties  or  it  be  against 
public  policy." 

The  Court  refused  to  enforce  the  personal  covenant  against  a 
subsequent  grantee  with  notice  by  record  on  the  ground  that  the 
grantor,  if  it  wa«  its  intention  to  bind  subsequent  grantees  could 
have  inserted  a  condition  subsequent,  the  violation  of  which  would 

35 


have  involved  a  forfeiture.  It  did  not  do  this,  but  inserted  a  purely 
personal  covenant.  In  this  case  it  does  not  appear  that  defendant 
had  actual  notice  outside  of  the  record  of  a  general  plan  of  improve- 
ment by  which  he  might  have  been  bound. 

Here  it  is  proper  to  distinguish  in  your  minds  the  difference 
between  a  covenant  and  a  condition  subsequent.  A  covenant  is  an 
agreement  to  do  or  not  to  do  certain  things,  while  a  condition 
subsequent  is  a  grant  upon  condition  that  if  certain  things  are  done 
or  not  done,  the  grantor  has  a  reversion  and  may  enforce  a  for- 
feiture. In  the  first  case,  he  does  not  reserve  to  himself  any  interest 
or  title,  relying  only  upon  the  agreement.  In  the  second  place,  in  a 
condition  subsequent  he  retains  a  certain  estate  in  himself  which 
may  be  under  proper  procedure  ripened  into  a  full  estate  by  for- 
feiture. This  distinction  must  be  clearly  borne  in  mind,  as  all  of  the 
law  bearing  upon  such  matters  hinges  upon  the  fact  of  whether  the 
covenant  be  in  the  nature  of  a  personal  agreement,  or  a  condition 
which  leaves  in  the  grantor  a  certain  title.  A  covenant  directly  and 
fundamentally  concerning  land  or  its  use  may  be  enforced  in  equity, 
irrespective  of  the  question  as  to  whether  the  covenant  is  one  which 
runs  with  the  land.  The  equitable  doctrine  is  that  a  covenant 
between  a  vendor  and  a  purchaser  on  the  sale  of  the  land  that  the 
purchaser  and  his  assigns  shall  use  or  abstain  from  using  the  land 
in  a  particular  way,  will  be  enforced  in  equity  against  all  subsequent 
purchasers  with  notice,  and  this  notice,  as  I  take  it,  means  either 
constructive  notice  by  the  record,  or  actual  notice  outside  of  it. 
Under  this  rule,  covenants  are  sustained  and  enforced  against 
assignees  with  notice,  stipulating  for  a  particular  mode  of  improve- 
ment, occupation  or  use  of  lands,  and  it  is  especially  applicable  to 
restrictive  covenants ;  thus,  covenants  in  respect  to  the  mode  of 
building  or  occupying  parts  of  a  large  tract;  certain  stipulations 
made  by  the  owners  as  to  the  use  of  ways ;  for  light  and  air,  etc. ; 
reserving  premises  exclusively  for  dwelling  houses ;  prescribing 
manner  of  improvements ;  not  to  carry  on  particular  trades  or 
business,  as  for  instance,  not  to  use  premises  for  the  sale  of  intoxi- 
cating liquors,  for  an  inn,  tannery,  gas  house,  etc.  Such  stipulations 
or  restrictions  which  are  sometimes  called  equitable  easements, 
servitudes  or  amenities,  are  enforced  by  injunction  irrespective  of 
the  question  of  privity  of  estate,  or  the  nature  of  the  tenure.  Thus 
they  can  be  enforced  by  injunction  whether  the  covenant  be  a  purely 
personal  one,  or  a  condition  subsequent,  but  they  must  be  such  as 
relate  to  or  concern  the  use  or  enjoyment  of  the  land.  It  is  not 
enough  that  the  covenant  affects  the  use  of  the  land  or  the  enjoy- 
ment of  an  easement  thereon,  or  the  value  or  profitableness  of  the 
use  thereof  in  a  collateral  way,  but  they  must  primarily  and  funda- 

36 


mentally  relate  to  the  use  or  enjoyment  of  the  land.  It  is  not 
necessary  to  give  notice  to  a  subsequent  grantee  of  any  such  cove- 
nant or  condition  subsequent  that  reference  be  made  in  the  deed  to 
him  of  such.  The  covenant  as  originally  created  is  sufftcient,  and  if 
one  finds  it  in  the  chain  of  title  it  is  as  effective  against  him  or  in 
his  favor  as  if  it  appeared  in  his  own  deed. 

Personal  covenants  will  be  enforced  against  any  grantee  in  the 
chain  who  has  notice,  actual  or  constructive,  only  when  it  can  be 
ascertained  from  the  language  of  the  deed  itself  and  from  the  sur- 
rounding circumstances  that  the  intent  of  the  parties  was  to  create 
a  covenant  affecting  directly  and  fundamentally  the  use  or  occu- 
pancy of  the  land,  and  the  language  must  be  apt  and  clearly 
expressed  to  produce  this  result,  or  the  facts  and  circumstances 
surrounding  the  transaction  must  clearly  point  to  such  intent. 
Furthermore,  the  covenant  must  be  equitable.  There  must  be  a 
sound  reason  for  its  enforcement.  Mere  whims  of  a  grantor  will 
not  be  regarded.  When  he  has  delivered  his  deed  there  is  no 
privity  of  estate  between  him  and  his  grantee  even  when  the  deed 
contains  a  covenant.  He  has  no  estate  left  in  him  as  he  would 
have  when  he  makes  a  deed  upon  a  valid  condition.  If  not  a  privity 
of  estate,  there  must  at  least,  I  apprehend,  be  a  mutuality  of  interest 
and  benefit  before  the  purely  personal  covenant  will  be  enforced 
against  subsequent  grantees.  I  am  not  permitted  when  I  have 
parted  with  my  estate,  to  impose  upon  my  successors  in  interest  for 
all  time  to  come,  restrictions  as  to  the  use  of  the  property  simply 
because  I  have  once  been  the  owner  of  it,  and  through  some  fancy 
or  whim  desire  that  it  be  put  only  to  certain  uses.  Primarily,  it  is 
against  public  policy  that  the  use  of  land  be  unnecessarily  restricted  ; 
secondarily,  the  law  declares  I  have  no  further  interest  in  the 
estate,  and  therefore  it  can  be  no  concern  of  mine  to  what  use  it  be 
devoted,  unless  I  be  peculiarly  affected  by  the  subsequent  use. 
And  then  I  must  show  a  reason  for  imposing  the  restrictions  which 
will  stand  in  equity. 

A  few  examples  of  purely  personal  covenants  will  not  be  amiss. 
"A"  conveys  to  "B"  with  a  covenant  that  "B"  will  support  "A" 
during  his  lifetime.  Here  is  an  agreement  binding  upon  "B,"  but 
there  is  nothing  to  prevent  "B"  from  conveying  the  property  and 
his  grantee  will  not  be  bound,  for  the  covenant  is  not  such  as  goes 
to  the  use,  occupancy  or  enjoyment  of  the  estate.  So  long  as  "B" 
retains  the  estate,  "A"  may  sue  to  recover  the  lands  upon  breach  of 
the  covenant.  No  so  when  "B"  has  conveyed.  "A"  must  then  look 
to  the  proceeds  of  the  sale  and  not  to  the  land. 

"A"  conveys  to  "B,"  his  son,  upon  the  covenant  that  "B"  shall 
continue  a  member  of  a  certain  church,  or  adhere  to  its  faith. 
"B's"  grantee  may  ignore  this  agreement. 

37 


1  deed  land  to  a  corporation,  "to  be  used  for  church  purposes," 
or  upon  the  covenant,  "that  a  schoolhouse  be  erected  thereon,"  or 
"that  a  railroad  shall  be  constructed  thereon  in  two  years."  These 
covenants  are  not  binding  upon  subsequent  grantees  and  the  title  is 
cleared  of  them  when  my  grantee  conveys.  It  will  be  shown  later 
that  by  a  valid  condition  subsequent  inserted  in  my  deed  I  can 
make  these  agreements  binding  upon  all,  for  we  shall  presently  see 
that  there  is  a  great  difference  between  covenants  and  conditions. 
One  reading  the  deed  must  determine  if  possible  whether  a  covenant 
is  a  purely  personal  one  or  one  running  with  the  land.  If  it  be 
determined  from  the  language  of  the  deed  or  the  surrounding  cir- 
cumstances that  it  was  the  intent  of  the  parties  to  create  a  covenant 
having  direct  and  immediate  reference  to  the  land,  relating  to  the 
mode  of  occupying  and  enjoying  the  same  beneficial  to  the  grantor, 
and  is,  in  truth,  inherent  in  and  attached  to  the  land  itself,  then  it 
must  be  regarded  no  matter  in  whose  hands  the  land  may  be. 
If  it  be  desired  to  clear  the  title,  a  deed  effective  for  the  purpose 
must  be  secured  from  the  grantor,  his  heirs  or  assigns,  of  the 
particular  right.  If  the  covenant  has  none  of  the  above  essentials, 
it  may  be  disregarded  entirely  after  the  land  has  passed  from  the 
original  grantee,  or  his  heirs. 

Section  1468  of  the  Civil  Code  enacted  in  1905,  is  as  follows : 

"A  covenant  made  by  the  owner  of  land  with  the  owner  of 
other  land  to  do  or  refrain  from  doing  some  act  on  his  own  land, 
which  doing  or  refraining  is  expressed  to  be  for  the  benefit  of  the 
land  of  the  covenantee,  and  which  is  made  by  the  covenantor 
expressly  for  his  assigns,  or  to  the  assigns  of  the  covenantee,  runs 
with  both  of  such  parcels  of  land." 

This  in  simple  language  means  that  two  owners-  of  separate 
tracts  may  make  contracts  each  with  the  other  to  do  or  not  to  do 
some  particular  act  on  their  own  lands,  and  if  in  the  contract  it  is 
expressed  to  be  for  the  mutual  benefit  of  the  parties,  their  heirs  or 
assigns,  a  covenant  is  then  made  which  runs  with  both  parcels  of 
land ;  therefore,  where  "A"  conveys  to  "B"  a  certain  lot,  making  it 
subject  to  certain  restrictions,  and  in  the  same  conveyance  agrees 
that  he  will  so  use  his  own  land  or  impose  such  restrictions  upon 
other  lands  in  his  tract,  the  land  remaining  in  "A"  after  his  con- 
veyance to  "B"  is  clearly  bound  with  that  which  he  has  conveyed 
to  "B,"  and  subsequent  purchasers  from  "A"  of  other  lots  in  his 
tract  take  with  this  notice.  The  rule  was,  before  the  adoption  of 
this  section,  that  covenants  running  with  the  land  could  be  created 
only  by  grant.  Although  this  section  has  not  so  far  as  I  have  been 
able  to  discover  been  construed  by  our  Supreme  Court,  it  would 
appear  that  real  covenants  running  with  the  land  and  binding  upon 

38 


all  parties  at  all  times,  can,  since  this  section  went  into  effect,  be 
created  in  this  State  by  contract,  either  in  deeds  or  executory  con- 
tracts. So,  if  it  be  found  in  any  deed  that  the  grantor  has  in 
appropriate  words  bound  his  remaining"  lands  in  the  same  respect 
as  he  binds  the  property  conveyed  by  the  deed,  or  in  any  executory 
contract  between  parties  in  which  the  lands  of  each  are  bound  by 
reciprocal  covenants,  then  one  dealing  with  the  grantor  in  subse- 
quent deeds  of  other  lands  affected  must  take  subject  to  such 
covenant,  whether  it  be  contained  in  the  deed  to  him  or  not. 
One  instance  will  suffice  for  illustration.  ''A"  conveys  to  "B"  with 
a  covenant  that  "B"  shall  not  erect  a  building  on  the  premises 
conveyed  to  cost  less  than  $1,000.00,  and  the  further  covenant  that 
"A"  will  not  build  any  house  on  any  other  lot  in  the  same  tract  to 
cost  less  than  $1,000.00,  and  that  he  will  impose  similar  conditions  in 
conveyance  of  other  lots  in  the  same  tract.  Here  "A"  has  bound 
himself  equally  with  "B."  To  clear  "A's"  title  it  will  require  a 
deed  from  "B,"  his  heirs  or  assigns,  as  the  covenants  are  reciprocal. 
"B"  has  the  same  interest  in  enforcing  the  covenant  in  his  favor 
as  has  "A"  in  enforcing  his  covenant  in  his  favor.  Not  many  cases 
of  this  kind  arise  as  it  is  the  common  practice,  at  least  in  this 
community,  to  impose  the  covenants  upon  the  lands  of  the  grantee 
only.  To  give  the  grantee  protection  against  violation  of  verbal 
agreements,  inducements  or  representations,  a  careful  conveyancer 
will  in  the  preparation  of  such  deeds  insert  reciprocal  covenants. 

We  now  come  to  consider  conditions  imposed  by  a  grantor  in 
his  conveyance  which  may  or  may  not  run  with  the  land,  whereby 
a  conditional  estate  is  granted.  In  cases  where  a  valid  condition  is 
imposed  in  appropriate  and  apt  terms,  an  interest  is  left  in  the 
grantor,  transmissible  to  his  heirs  or  assigns,  a  sort  of  estate  as 
there  is  a  possibility  of  reversion.  This  is  not  true  when  the  matter 
is  a  pure  covenant  and  not  a  condition,  as  for  instance :  Where  a 
deed  is  given  containing  this  clause:  "This  deed  is  given  by  the 
parties  of  the  first  part  and  accepted  by  the  second  party  upon  the 
express  agreement  of  the  second  party  to  build  or  cause  to  be  built 
upon  said  premises  within  six  months  from  date  a  house,  etc.," 
this  was  held  to  be  a  personal  covenant  and  a  forfeiture  of  the  title 
was  denied.  (Hawley  vs.  Kafitz,  148  Cal.  393.)  The  deed  contained 
a  provision  that  the  land  should  be  used  as  a  street  and  not  as  a 
building  lot.  This  was  held  to  be  a  covenant  only,  and  the  title  did 
not  revert  on  the  breach  of  the  covenant.  (Weller  vs.  Brown,  160 
Cal.  518.) 

A  covenant  between  the  grantor  and  the  grantees  in  a  deed 
which  merely  imposes  a  burden  of  restrictions  upon  the  grantee 
and   does   not   reserve   or   create   any   interest   in   the   grantor  by 

39 


conditions  subsequent  in  the  grant,  and  does  not  purport  to  inure 
to  the  benefit  of  an  assignee  of  the  grantor  or  to  bind  the  assigns  of 
the  grantee,  is  personal  in  its  nature  and  does  not  run  with  the  land 
or  charge  an  assignee  of  the  grantee  with  such  burden.  Thus,  a 
covenant  in  a  deed  to  a  yacht  club  that  "in  consideration  of  the 
conveyance  the  landy  should  not  be  used  for  any  purposes  other 
than  for  hotel  or  lodging  house  or  club  purposes"  is  a  personal 
covenant  which  binds  the  yacht  club  only  during  its  tenure  and  is 
not  binding  upon  its  grantee. 

Any  covenant  for  the  forfeiture  of  title  in  satisfaction  of  a  debt 
is  void.  Thus,  if  I  make  my  deed  to  "A,"  stating  in  it  that  it  is  a 
condition  of  the  deed  that  it  shall  be  operative  only  in  case  that  "B" 
fails  to  pay  me  $500.00  within  60  days,  this  condition  is  void.  The 
bare  legal  title  will  pass,  but  the  instrument  is  a  mortgage.  In  a 
broad  sense  and  broadly  speaking,  a  condition  is  of  a  higher  order 
than  a  personal  covenant.  It  will  be  observed  that  the  Statute 
limiting  covenants  which  may  run  with  the  land  to  such  covenants 
as  benefit  the  land  conveyed  does  not  apply  to  conditional  estates. 
Most  frequently  the  language  used  by  the  parties  in  framing  the 
condition  imports  an  intention  to  create  more  than  a  personal 
covenant.  Difificulty  is  met  in  distinguishing  in  many  cases  between 
a  purely  personal  covenant  and  a  covenant  which  binds  the  land, 
owing  to  faulty  expression.  It  is  a  cardinal  rule  that  to  hold  an 
estate  to  be  upon  condition,  the  intent  must  be  expressed  in  clear 
and  apt  language,  as  Courts  are  hostile  to  forfeitures.  It  would 
serve  no  good  end  to  cite  instances,  as  each  particular  case  must  be 
decided  in  the  light  of  its  own  peculiar  circumstances.  It  is  a  safe 
guiding  rule  that  it  must  appear  from  the  language  used  in  the 
conveyance  clearly  and  beyond  question  that  the  parties  intended 
to  create  a  conditional  estate  involving  the  right  of  forfeiture. 
In  Quatman  vs.  McCray,  (128  Cal.  285),  forfeiture  was  declared  for 
the  breach  of  the  following  condition  or  covenant,  whichever  it 
might  be  deemed  to  be,  although  it  is  my  best  judgment  that  the 
language  used  created  a  covenant  and  not  a  condition : 

"And  this  conveyance  is  made  upon  the  following  express 
condition,  viz :  That  any  building  to  be  used  as  a  dwelling  house 
erected  upon  these  premises  within  two  years,  shall  cost  not  less 
than  $1,200.00,  and  shall  be  located  not  less  than  20  feet  from  the 
front  line  of  said  lot." 

The  language  of  the  deed  did  not  purport  to  bind  assigns,  and 
there  is  no  provision  of  forfeiture.  While  it  was  termed  a  condition 
this  does  not  necessarily  make  it  such.  Two  things  must  be 
considered  here  to  clearly  understand  the  judgment.  The  action 
was  between  the  original  parties  to  the  deed  and  the  decision  does 

40 


not  go  to  the  point  of  construing  the  language  of  the  deed  either  as 
a  condition  or  as  a  personal  covenant.  The  evidence  was  only  as  to 
the  breach  of  the  covenant  and  the  point  was  not  raised  as  to 
whether  it  was  purely  personal  or  one  running  with  the  land. 
This  case  has  been  often  referred  to  as  proving  that  a  forfeiture 
can  be  enforced  upon  a  purely  personal  coyenant,  but  I  do  not 
consider  it  of  weighty  authority  for  the  reason  spoken  of,  that  the 
evidence  was  only  as  to  the  breach  of  the  covenant  and  no  attempt 
was  made  to  avoid  the  forfeiture  on  any  other  grounds.  Forfeitures 
are  not  favored  in  law  and  the  Courts  will  not  declare  an  estate  to 
be  upon  condition  unless  the  intent  of  the  parties  is  too  clear  and 
convincing  for  other  construction.  Forfeitures,  as  such,  are  never 
enforced  if  they  are  couched  in  ambiguous  terms.  Conditions 
involving  forfeitures  are  construed  strictly  against  the  parties  for 
whose  benefit  they  are  created,  and  are  construed  with  the  utmost 
jealousy  to  prevent  restraint  going  beyond  expressed  stipulations, 
and  the  intention  of  the  parties  as  shown  by  the  instrument  must 
be  looked  at  to  determine  the  nature  of  the  condition,  and  no  other 
evidence  can  be  taken.  It  must  appear  from  the  language  of  the 
deed  itself  that  it  was  the  clear  intent  to  make  a  condition  whereby 
the  title  could  be  forfeited,  and  not  a  personal  covenant.  Language 
which  merely  describes  the  use  to  which  property  is  to' be  devoted 
does  not  create  a  condition  such  as  "to  be  used  for  church  purposes" 
and  the  like,  unless  this  be  made  upon  the  condition  that  the  prop- 
erty be  used  for  such  purposes,  and  if  not  so  used  that  the  title 
shall  revert  to  the  grantor,  his  heirs  and  assigns. 

There  is  a  distinction  between  estates  made  upon  condition 
and  conditional  limitations  of  estates  which  must  be  borne  in  mind. 
In  the  former  case  where  an  estate  is  made  upon  a  valid  condition 
and  the  right  of  reversion  or  forfeiture  is  retained,  the  whole  estate 
does  not  pass  out  of  the  grantor.  He  reserves  enough  to  enforce 
the  condition  and  recover  his  estate.  There  is  left  to  him  the 
possibility  of  reverter  to  himself  or  his  heirs.  This  is  a  sort  of  an 
estate  in  the  land  and  descends  to  his  heirs  or  is  assignable  to  him. 
This  right  of  reverter  lies  dormant  and  comes  into  life  upon  breach 
of  the  condition  whereby  the  owner  of  the  right  may  enforce  the 
penalty.  It  does  not  restrain  or  interfere  with  the  alienation  of  the 
grantee's  title.  The  right  considered  as  such  is  of  as  high  order  as 
the  grantee's  right  to  the  land.  A  purely  conditional  estate  then  is 
one  where  the  right  of  reversion  is  in  the  grantor,  his  heirs  or 
assigns.  This  right  cannot  be  saved  to  a  stranger  by  the  same 
instrument  which  creates  the  condition.  Additional  limitations  in 
the  conveyance  whereby  upon  breach  an  estate  arises  and  is  vested 
in  a  third  person  upon  a  contingency  at  a  future  uncertain  period 

41 


are  void.  Nothing  is  left  in  the  grantor.  His  whole  estate  passes 
by  his  conveyance,  and  this  being  so,  the  additional  limitation  is 
void  for  uncertainty.  This  sort  of  an  attempted  limitation  over  or 
conveyance  over  must  not  be  confounded  wth  those  which  are  to 
take  eflfect  upon  a  date  certain  or  the  certain  happening  of  an  event. 

It  is  lawful  to  convey  the  estate  over  to  a  third  person  upon 
the  certain  termination  of  a  prior  estate.  Any  attempted  creation 
of  a  condition  then  which  depends  upon  the  happenings  of  some 
event  at  an  uncertain  time,  or  by  which  it  is  attemped  to  restrain 
the  power  of  alienation  beyond  the  lives  of  persons  in  being  at  the 
date  of  its  creation  is  void  and  may  be  ignored.  For  instance : 
Should  a  deed  be  made  to  the  trustees  of  a  certain  church  upon  the 
express  condition  that  the  minister  should  constantly  reside  and 
dwell  on  the  property  at  all  times,  and  in  case  he  should  not  do  so 
that  the  grant  should  be  void  and  of  no  force,  and  that  the  land 
should  then  revert  to  the  grantor,  and  by  the  same  instrument  he 
gives  the  same  to  John  Smith  and  his  heirs  forever,  this  condition 
is  void  and  may  be  ignored,  the  full  title  vesting  in  the  trustees  of 
the  church,  clear  of  the  condition.  This  is  upon  the  theory  that  the 
entire  estate  by  the  same  deed  passed  out  of  the  grantor  forever. 
The  first  estate  granted  to  the  trustees  of  the  church  vests  immedi- 
ately, but  the  expectant  interests  of  John  Smith  does  not  take  effect 
until  the  happening  of  the  contingency  provided,  but  both  owe  their 
existence  to  the  same  grant  or  gift  and  being  an  ultimate  disposition 
of  the  entire  fee  as  well  after  as  before  the  breach  of  conditions, 
there  is  nothing  left  in  the  grantee  or  his  heirs. 

The  right  or  possibility  of  reverter  which  on  creation  of  an 
estate  in  fee  on  condition  merely,  would  remain  in  him  is  given 
over  by  the  same  instrument  to  Smith,  and  this  is  to  take  effect 
on  the  breach  of  the  condition.  The  material  difference,  therefore, 
between  an  estate  in  fee  on  condition  and  on  conditional  limitation 
is  briefly  this :  That  the  former  leaves  in  the  grantor  a  vested 
right  which  by  its  very  nature  is  reserved  to  him  as  a  present 
existing  interest  descendable  to  his  heirs,  while  the  latter  passes 
the  whole  interest  of  the  grantor  at  once  and  creates  an  estate  to 
arise  and  vest  in  a  third  person  upon  contingency  at  a  future  and 
uncertain  period  of  time.  This  possibility  of  reverter  in  an  estate 
upon  condition  is  a  vested  interest  in  real  property,  and  is  capable 
at  all  times  of  being  released  to  the  person  holding  the  estate  on 
condition,  and  if  so  released  conveys  an  absolute  title  thereto  in  him. 
The  grant  of  a  fee  on  condition  even  though  it  leave  an  estate  in  the 
grantor,  does  not  therefore  fetter  and  tie  up  estates  so  as  to  prevent 
their  alienation,  and  thus  contravene  the  policy  of  the  law  which 
aims  to  secure  the  free  and  unembarrassed  disposition  of  real 
property. 

42 


\ 


It  is  otherwise  with  grants  with  a  limitation  over  upon  a 
condition  or  event  of  an  uncertain  or  indeterminate  nature.  The 
grant  over  to  Smith  in  the  case  above  cited,  depending  upon  a 
condition  or  an  event  which  may  never  happen,  passes  no  vested 
interest  or  estate.  It  is  impossible  to  ascertain  in  whom  the  ultimate 
right  of  the  estate  may  vest  or  whether  it  will  ever  vest  at  all,  and 
therefore  no  conveyatice  or  mode  of  alienation  can  pass  an  absolute 
title,  because  it  is  wholly  uncertain  in  whom  the  title  will  vest  on 
the  happening  of  the  event  or  breach  of  the  condition  upon  which 
the  ulterior  grant  is  to  take  effect.  The  true  test  by  which  to  ascer- 
tain whether  the  grant  over  is  void  for  remoteness  is  very  simple. 
It  does  not  depend  upon  the  character  or  nature  of  the  contingency, 
or  event  upon  which  it  is  to  take  effect.  These  may  be  varied  to 
any  extent,  but  it  turns  on  the  single  question  whether  the  pre- 
-  scribed  contingency  or  event  may  not  arise  until  after  the  time 
allowed  by  law  within  which  the  grant  over  may  take  effect,  that 
is  to  say,  within  the  lives  of  those  in  being  at  the  time  of  its 
creation. 

Section  716  of  the  Civil  Code  is  to  the  effect  that  every  future 
interest  is  void  in  its  creation  which  by  any  possibility  may  suspend 
the  absolute  power  of  alienation  for  a  longer  period  than  is  pre- 
scribed by  the  chapter;  such  power  of  alienation  is  suspended  when 
there  are  no  persons  in  being  by  whom  an  absolute  interest  can 
be  conveyed. 

Section  715  of  the  Civil  Code  reads:  "The  absolute  power  of 
alienation  cannot  be  suspended  by  any  limitation  or  condition 
whatever  for  a  longer  period  than  during  the  continuance  of  the 
lives  of  persons  in  being  at  the  creation  of  the  limitation  or  condi- 
tion except  in  the  single  case  mentioned  in  Section  772." 

Section  772  of  the  Civil  Code  provides  that  a  contingent 
remainder  in  fee  may  be  created  on  a  prior  remainder  in  fee,  to  take 
effect  in  the  event  that  the  persons  to  whom  the  first  remainder  is 
limited  die  under  the  age  of  21  years,  or  upon  any  other  contingency 
by  which  the  estates  of  such  persons  may  be  determined  before 
they  attain  majority.  Conditional  limitations  therefore  as  defined 
above,  or  conditions  which  by  any  possibility  may  suspend  the 
power  of  alienation  beyond  the  period  permitted  by  the  Statute, 
may  be  ignored  and  no  steps  are  necessary  to  clear  the  title. 

Conditions  which  may  be  lawfully  imposed  are  of  two  classes — 
conditions  precedent  and  conditions  subsequent.  A  condition  pre- 
cedent is  one  which  is  to  be  performed  before  some  right  dependent 
thereon  accrues  or  some  act  dependent  thereon  is  performed.  (Sec- 
tion 1436  Civil  Code.)  A  condition  subsequent  is  one  referring  to  a 
future  event  upon  the  happening  of  which  the  obligation  becomes 

43 


no  longer  binding  upon  the  other  party  if  he  chooses  to  avail  him- 
self of  the  condition,  (Section  1438  Civil  Code)  and  where  an  estate 
or  interest  is  so  given  as  to  vest  immediately,  subject  only  to  be 
divested  by  some  subsequent  act  or  event.  (Section  1349  Civil 
Code.) 

Broadly  speaking,  as  applied  to  conveyances  wherein  conditions 
precedent  are  imposed,  title  does  not  vest  in  the  grantee  until 
performance.  Where  a  condition  subsequent  is  imposed,  the  title 
vests  at  once  in  grantee  upon  delivery  of  deed  subject  to  defeat  upon 
breach  of  conditions.  Thus,  if  I  deed  to  "A"  upon  the  condition 
that  he  shall  within  six  months  erect  a  house  on  said  premises,  the 
title  does  not  pass  to  him  until  the  condition  be  complied  with. 
If,  however,  I  deed  to  "B"  upon  the  condition  that  in  case  any  house 
is  erected  thereon  it  shall  cost  a  certain  sum,  there  the  title  passes 
subject  to  be  defeated  upon  breach  of  the  covenant. 

To  establish  of  record  the  fact  that  title  has  actually  vested  in 
the  grantee,  upon  performance  of  any  condition  precedent,  a  quit 
claim  deed  from  the  grantor  imposing  the  condition,  his  heirs  or 
assigns,  should  be  recorded  that  any  subsequent  examiner  of  the 
chain  of  title  will  not  be  put  upon  inquiry  to  ascertain  if  the  condi- 
tion precedent  were  actually  performed.  Certain  other  conditions 
are  void  abnitio.  Those  imposing  restraints  upon  marriage,  except 
of  a  minor,  are  void,  but  this  does  not  affect  conditions  where  the 
intent  was  not  to  forbid  marriage,  but  only  to  give  the  use  of  the 
property  until  marriage. 

Conditions  restraining  the  alienation  of  the  property,  when 
repugnant  to  the  estate  granted  are  void.  Thus  a  condition  inserted 
•n  the  deed  that  the  grantee  shall  not  sell  without  consent  of  the 
grantor  is  void,  likewise,  a  condition  that  the  grantee  shall  sell  to 
grantor  only  at  a  stipulated  price  is  void.  A  condition  subsequent 
which  is  impossible  of  performance  is  void.  The  title  passes  free 
of  condition,  but  not  so  when  the  condition  is  precedent.  If  a  con- 
dition precedent  is  impossible  from  the  beginning,  or  for  any  reason 
incapable  of  performance,  no  title  will  pass.  If  a  condition  precedent 
requires  the  performance  of  an  act  wrong  in  itself,  the  deed  is  void 
and  passes  no  title.  If  it  requires  the  performance  of  an  act  not 
wrong  of  itself,  but  otherwise  unlawful,  the  deed  passes  the  title 
freed  of  the  condition. 

We  come  now  to  the  consideration  of  covenants  and  conditions 
in  deeds  which  relate  to  the  use,  occupancy  and  manner  of  improve- 
ment of  the  property  granted,  and  as  most  commonly  found  in 
modern  conveyances.  Of  late  years  it  has  become  common  custom 
in  California,  and  particularly  in  this  community,  to  grant  lands 
upon  conditions  making  for  the  betterment  of  the   neighborhood. 

44 


It  has  indeed  become  such  a  custom  that  it  may  be  said  to  be 
common  knowledge  that  such  conditions  are  invariably  imposed  in 
first  class  residence  districts.  It  is  not  unlikely  that  Courts  would 
take  judicial  knowledge  of  this  fact.  It  is  of  the  greatest  import- 
ance to  determine  what  notice  of  restrictions  the  purchaser  of  such 
property  shall  be  deemed  to  have.  These  points  must  first  be 
emphasized : 

1.  It  is  lawful  to  create  covenants  and  conditions  which  may 
not  run  with  the  land,  which  will  be  binding  upon  all  subsequent 
owners  with  notice,  actual  or  constructive,  for  all  time  to  come. 
The  law  permits  the  use  of  property  to  be  restricted  within  reason 
and  will  enforce  such  agreements  so  long  as  the  reason  for  such 
restriction  exists. 

2.  Courts  will  not  permit  a  forfeiture  of  title  unless  he  who 
has  the  reverter  come  into  Court  with  clean  hands.  He  cannot 
violate  his  own  agreement  or  acquiesce  in  the  violation  of  similar 
agreements  to  the  prejudice  of  any  owner,  nor  will  the  Court  enjoin 
or  abate  any  violation  at  the  suit  of  one  who  by  laches  or  tacit 
consent  has  estopped  himself  in  equity. 

3.  Courts  are  prompt  to  relieve  property  from  such  restric- 
tions where  the  character  of  the  property  or  the  surroundings  have 
so  changed  since  the  creation  of  the  condition  as  to  render  the  re- 
striction unnecessarily  burdensome,  or  of  no  benefit  to  him  in 
whose  favor  they  operate. 

4.  In  cases  where  a  general  plan  of  subdivision  is  shown  to  be 
contemplated,  either  by  reference  in  deed  to  such  a  plan,  or  to  a 
map;  or,  if  it  can  be  ascertained  from  surrounding  circumstances 
that  conditions  have  been  imposed  in  other  deeds  of  lands  in  the 
same  tract,  in  pursuance  of  a  general  plan  of  improvement,  it  must 
be  held  in  the  light  of  decisions  that  any  grantee  with  notice,  actual 
or  constructive,  of  conditions  or  covenants  in  prior  deeds  in  his  own 
chain  of  title,  or  in  the  chain  of  title  of  other  lots  in  the  same  tract,, 
takes  title  subject  to  the  restrictions  and  is  bound  by  them.  The 
grantor  in  such  a  case  gives  to  his  several  grantees  in  the  tract  what 
has  been  termed  a  "negative  easement"  in  all  lots  in  the  tract,  which 
enables  them  in  equity  to  restrain  or  abate  any  violation  of  the 
condition,  and  this  whether  it  be  so  expressed  in  the  deeds  or  not. 

5.  The  common  grantor  may  in  such  cases  qualify  his  convey- 
ances and  limit  the  right  of  injunction  or  abatement  to  himself,  or 
to  the  owners  of  adjoining  property,  or  owners  of  property  on  the 
same  street,  or  the  like,  in  which  case  the  persons  to  whom  the  right 
is  limited  are  the  only  ones  whose  consent  is  necessary  to  an  abro- 
gation of  the  restrictions. 

6.  The  common  grantor  who  has  created  the  conditions  can- 

45 


not,  even  after  he  has  parted  with  his  remaining  property  destroy 
this  negative  easement  by  his  own  acts.  He  can  release  his  right  of 
reverter  but  no  more. 

There  is  much  conflict  in  the  decisions  as  to  whether  a  grantee 
is  bound  to  look  further  than  to  the  deeds  in  his  immediate  chain  of 
title  for  covenants  or  restrictions  which  might  put  him  upon  notice 
of  matters  aflfecting  his  own  title.  It  would  be  an  absurdity  to  say 
that  he  is  required  to  examine  every  other  conveyance  made  by  his 
grantor  to  ascertain  if  his  grantor  has  by  any  chance  entered  into 
covenants  which  might  put  the  enquirer  on  notice,  of  some  right ; 
but  the  weight  of  authority  seems  to  be  that  he  is  bound  by  actual 
notice  of  such  covenants,  whether  they  be  in  his  deed  or  not,  and 
by  such  surrounding  circumstances  attending  the  execution  of  deeds 
from  the  common  grantor,  such  as  advertising,  signs  on  the  prop- 
erty and  the  like,  or  by  such  physical  condition  of  the  property 
and  the  vicinage  as  might  put  a  prudent  man  upon  inquiry  as  to 
possible  restrictive  covenants  affecting  all  the  lands  in  the  neigh- 
borhood. He  cannot  shut  his  eyes  and  ears  and  say  he  had  no  means 
of  knowing  what  is  apparent  to  any  observer  or  what  is  a  matter 
of  common  cognizance. 

It  is  true  there  are  decisions  of  the  Courts  of  this  State  that 
indicate  that  in  the  absence  of  recitals  in  the  deed  from  the  common 
grantor  it  cannot  be  inferred  that  the  grantor  intended  that  the 
restrictions  should  operate  in  favor  of  other  property  owned  by  him, 
notably  Los  Angeles,  etc.,  vs.  Muir,  (136  Cal.  36),  and  Berryman  vs. 
Hotel  Savoy  Co.,  (160  Cal.  569).  But  it  is  by  no  means  clear  in  these 
cases  that  there  were  no  circumstances  pointing  to  such  intent,  or 
that  evidence  was  adduced  to  show  intent  from  surrounding  circum- 
stances. Such  features  of  title  are  practically  new  in  this  State,  and 
until  the  point  is  well  settled  by  our  Supreme  Court,  it  will  not  be 
safe  to  assume  that  the  grantee  is  bound  only  by  such  notice  as  he 
finds  in  his  deed  or  chain  of  title.  Owing  to  the  fact  that  it  has  been 
the  custom  only  of  late  years  to  insert  restrictive  covenants  in 
deeds  relating  to  the  character  of  buildings,  etc.,  there  have  been 
but  few  cases  before  our  Supreme  Court  where  these  covenants  are 
construed.  We  are  therefore  compelled  to  look  to  other  jurisdictions 
to  see  what  interpretation  and  construction  other  Courts  have  put 
upon  such  conditions,  and  from  this  investigation  to  make  a  surmise 
or  guess  at  what  our  Courts  would  say  under  similar  circumstances. 

There  are  certain  well  defined  rules  of  law  and  equity  which 
apply  in  all  jurisdictions,  and  it  is  safe  to  say  that  our  Courts  would 
follow  the  lead  of  Courts  in  other  jurisdictions  when  similar  cases 
are  presented.  We  are  therefore  left  in  a  situation  of  attempting  to 
define  in  nearly  every  instance  what  the  Supreme  Court  will  say  in 

46 


any  given  case.  It  follows  therefore,  that  the  illustrations  which  I 
shall  use  are  not  to  be  taken  as  conclusive,  but  merely  as  pointers, 
indicating  what  in  all  probability  our  Supreme  Court  would  hold 
under  like  circumstances.  For  instance,  our  Supreme  Court  would 
in  all  likelihood  hold  that  a  condition  that  the  property  should  never 
be  owned  by,  sold  to,  leased  to  or  rented  to  a  person  other  than  of 
the  Caucasian  race,  is  valid  and  binding.  This  and  similar  condi- 
tions indeed  have  been  construed  by  other  Courts  and  in  a  few 
instances  held  to  be  invalid,  but  the  great  weight  of  authority  is  in 
favor  of  their  validity.  It  has  been  assumed  that  such  a  condition 
is  in  violation  of  the  United  States  Constitution  which  guarantees 
equal  right  to  all  citizens,  but  the  fallacy  of  this  argument  is  appar- 
ent when  it  is  considered  that  there  are  no  public  rights  concerned 
in  the  transaction.  I  can  do  with  my  property  as  I  see  fit,  sell  it  to 
whom  I  choose,  and  no  man  can  compel  me  to  sell ;  therefore,  if  I 
refuse  to  sell  to  a  negro,  that  individual  has  no  right  of  action 
against  me.  If  the  State  were  to  undertake  to  limit  or  restrict  the 
right  of  property  in  any  colored  citizen,  any  individual  of  that  race 
could  attack  an  act  as  being  in  violation  of  the  United  States 
Constitution,  but  the  principle  here  is  wholly  different  from  that 
which  governs  the  transaction  between  individuals.  The  same  rules 
and  principles  apply  to  other  races  even  though  there  be  treaty 
relations  between  their  sovereign  governments  which  permit  the 
ownership  of  lands  in  the  alien  country,  but  this,  as  I  point  out,  is 
only  where  the  public  is  concerned  and  no  individual  is  afifected  by 
these  public  policies  or  rights  given  under  public  acts. 

It  is  well  established  in  every  jurisdiction  so  far  as  I  have  been 
able  to  learn  that  restrictions  as  to  locations  of  buildings  on  a  given 
building  line  are  universally  upheld.  So  also  those  conditions  or 
restrictions  relating  to  the  cost  of  the  building  and  restrictions 
forbidding  the  sale  of  intoxicants.  It  has  been  held  that  the  latter 
is  a  restriction  in  restraint  of  trade,  and  hence  is  void  as  against 
public  policy,  but  almost  universally  it  has  been  held  that  such  is 
not  the  case.  Here  again  we  have  the  distinction  between  the  public 
interests  and  private  rights. 

It  is  a  rule  of  construction  of  such  covenants  and  conditions 
that  all  questions  of  doubt  must  be  resolved  in  favor  of  a  free  use 
of  property  and  against  restriction.  It  is  a  tendency  of  the  Courts 
to  discourage  restrictions  on  the  free  alienation  of  property  and  its 
free  use,  and  the  wording'of  the  deed  must  be  construed  as  nearly  as 
possible  according  to  the  obvious  intent  of  the  parties  contracting, 
but  the  rule  that  when  all  other  means  fail  doubts  are  to  be  resolved 
in  favor  of  the  grantee,  do  not  apply  in  the  construction  of  restrictive 
covenants.    The  opposite  is  the  rule,  and  such  construction  must  be 

47 


given  it  which  would  defeat  a  forfeiture  in  cases  of  doubt.  The 
primary  rule  governing  the  interpretation  of  restrictive  covenants  is 
to  gather  the  intention  of  the  parties  from  their  words  by  reading 
not  simply  a  single  clause  of  the  agreement,  but  the  entire  contract 
must  be  ascertained  and  determined  from  the  language  of  the  cove- 
nant itself,  considered  in  connection  with  surrounding  circumstances 
at  the  time  the  covenant  was  made.  It  must  be  remembered  that  a 
Court  can  take  evidence  outside  of  the  instrument  to  enable  the 
Court  to  place  itself  in  the  position  of  the  parties  at  the  time  of 
the  making  of  the  restrictive  covenant  for  the  purpose  of  ascertain- 
ing their  true  intention,  but  one  who  deals  with  a  deed  without  this 
judicial  construction  is  confined  wholly  and  entirely  to  the  words 
used  in  the  instrument  itself.  In  this  construction  the  words  used 
are  to.be  taken  in  their  ordinary  and  popular  sense  unless  they  have 
acquired  a  peculiar  or  special  meaning  in  the  particular  relation  in 
which  they  appear,  or  in  respect  to  the  particular  subject  matter,  or 
unless  it  appears  from  the  context  that  the  parties  intended  to  use 
them  in  a  different  sense. 

I  will  recite  a  few  instances  where  Courts  have  construed  the 
words  used  by  the  parties.  As  I  have  stated  before,  these  state- 
ments must  not  be  taken  as  authoritative,  but  only  as  instances 
which  point  to  a  probable  holding  by  our  Supreme  Court  if  the 
point  were  to  be  presented. 

It  appears  to  be  generally  held  that  when  a  person  covenants 
that  he  will  not  erect  a  building  within  a  specified  distance  from  the 
line,  he  necessarily  covenants  that  he  will  not  erect  any  part  of  a 
building  within  the  distance  named.  That  it  is  a  violation  of  the 
covenant  if  he  erect  a  building  with  a  massive  porch  or  with  a  line 
of  bay  windows  within  the  prohibited  distance.  It  would  also  be 
held  that  the  erection  of  a  fence  along  the  side  of  the  lots  high 
enough  to  shut  off  the  view  of  the  adjoining  property  would  be  held 
by  the  Courts  to  be  a  building.  In  one  case  it  was  held  that  a  bill 
board  of  a  permanent  nature  15  feet  high  and  156  feet  long  erected 
along  the  boundary  of  the  land  was  a  building  within  the  meaning 
of  the  covenant  prohibiting  building  within  a  certain  distance  of  the 
line.  It  was  said  it  was  not  intended  to  affirm  in  every  contract  a 
bill  board  was  a  building,  but  in  this  particular  case  it  was  so  held. 
Merely  incidental  encroachments  on  the  space  by  way  of  steps  or 
eaves  or  ornamental  projection  might  not  amount  to  a  violation  of 
the  agreement  not  to  build  within  a  certain  line,  yet  a  porch  extend- 
ing the  whole  width  of  the  house  as  a  substantial  part  of  it  is  clearly 
so.  If  it  could  occupy  any  part  of  the  prohibited  space,  it  could 
occupy  all  of  it.  It  is  held  in  one  California  case,  Alderson  vs. 
Cutting,  (163  Cal.,  503),  that  a  restriction  prohibiting  the  erection  on 

48 


the  premises  in  question  of  any  building  other  than  a  residence  with 
the  customary  outbuildings,  and  that  such  residence  should  not  be 
erected  less  than  a  specified  distance  from  the  front  line  of  said 
premises,  was  violated  by  the  erection  of  a  residence  so  that  the  root 
of  its  porch  extended  2  feet  and  4  inches  over  the  restricted  space, 
the  pillars  of  which  encroached  5  inches  thereon.  In  this  case  it 
was  held  that  the  placing  of  steps  within  the  restricted  space  was 
not  a  violation. 

The  word  "outbuilding"  or  "outhouse"  has  been  defined  as  a 
building  adjoining  or  belonging  to  a  dwelling  house.  It  is  some- 
thing to  be  used  in  connection  with  the  main  building.  (Firth  vs. 
Marovich,  160  Cal.,  257.) 

A  stable  cannot  be  held  to  be  an  outbuilding  unless  there  is  a 
main  building  on  the  lot. 

The  word  "dwelling"  in  its  broadest  significance  denotes  a 
building  used  as  a  settled  human  abode  and  in  common  parlance, 
when  not  qualified,  conveys  the  notion  of  a  home ;  that  it  is  a  house 
occupied  as  a  residence  in  distinction  from  a  store,  ofBce  or  other 
building.  In  any  proper  sense  there  is  always  one  controlling  idea 
in  the  use  of  the  word  "dwelling  house,"  and  that  is,  it  is  a  house 
intended  for  human  habitation.  A  covenant  that  no  building 
or  structure  of  any  kind  whatsoever  other  than  a  dwelling 
should  be  erected  thereon  is  violated  by  the  erection  of  a  private 
garage.  The  restriction  against  any  use  other  than  a  private 
dwelling  restricts  the  character  of  buildings  by  eliminating  all 
buildings  for  business  purposes,  and  also  by  force  of  the  word 
"private"  excludes  buildings  for  residential  purposes  of  public 
character,  such  as  hotels  or  general  public  boardiirg  houses  or 
lodging  houses. 

The  weight  of  authority  seems  to  be  that  the  erection  of  a  flat 
or  tenement  house  or  apartment  house  does  not  constitute  a  viola- 
tion of  a  covenant,  providing  that  only  dwelling  houses  shall  be 
built  upon  the  premises.  A  restriction  prohibiting  the  erection  of 
any  buildings  other  than  a  dwelling  house  was  held  to  forbid  the 
erection  of  a  double  house  with  one  entrance.  I  do  not  think  this 
would  apply  had  the  words  been  "dwelling  only,"  not  confining  it 
to  a  single  house.  Where  the  restriction  is  that  not  more  than  one 
dwelling  house  to  be  used  as  a  private  residence  shall  be  erected,  it 
was  held  that  the  erection  of  residential  flats  was  a  violation  even 
if  the  number  of  houses  was  unrestricted.  The  erection  of  a  double 
house  on  a  lot  constitutes  a  violation  of  a  restriction  forbidding 
more  than  one  building  to  be  erected  on  the  lot  for  dwelling  pur- 
poses only.  There  is  a  distinction  between  the  term  "flat"  and 
"apartment  house."     The  latter  term  denotes  an  entire  building, 

49 


while  the  former  means  only  the  separate  residential  portions  inside 
the  building.  There  can  be  no  exact  or  general  rule  of  construction 
laid  down  where  these  conditions  are  met.  It  is  the  only  safe  rule 
to  observe  that  Courts  will  hold  the  parties  strictly  to  their  agree- 
ments as  disclosed  by  the  instrument,  but  will  not  expand  or  enlarge 
their  words  to  give  them  a  meaning  other  than  their  popular  or 
accepted  meaning.  Every  case  must  be  construed  by  itself,  and  it 
is  a  safe  practice  to  take  into  consideration  the  surrounding  circum- 
stances and  the  surrounding  neighborhood,  the  character  of  other 
buildings  in  the  tract  where  reliance  cannot  be  placed  upon  the 
exact  language  of  the  deed.  It  must  be  borne  in  mind  that  there  are 
two  rights  created  by  such  restrictive  covenants ;  one  in  the  grantor 
who  retains  to  himself  the  right  of  forfeiture  and  reverter,  and  the 
other  given  to  all  other  owners  in  the  tract,  or  to  such  owners  to 
which  the  right  has  been  limited  when  the  plan  is  one  of  general 
subdivision,  and  it  can  be  shown  that  it  was  the  intent  to  restrict 
and  govern  the  use  of  property  in  all  the  tract. 

Now,  no  property  owner  in  the  tract  can  maintain  a  suit  to 
enjoin  a  violation  or  to  abate  a  violation  of  such  restrictions  if  he 
himself  has  violated  them,  or  if  he  has  stood  by  and  not  objected 
to  violations  of  restrictions  by  other  owners.  Neither  can  the 
original  grantor  enforce  his  right  of  forfeiture  against  any  particular 
one  if  he  has  waived  this  right  in  favor  of  any  other  owner,  or  if  he 
himself  has  violated  the  conditions.  I  therefore  suggest  the  follow- 
ing rules  for  your  guidance  in  construction  of  covenants  in  deeds. 

Conditional  limitations  as  defined  above,  and  all  covenants  and 
conditions  which  may  by  any  possibility  suspend  the  power  of  alien- 
ation beyond  the  lives  of  those  in  being  at  the  time  of  the  creation 
the  covenant  or  condition  may  be  ignored.  Where  it  can  be  ascer- 
tained from  the  nature  of  the  deed  that  the  covenant  or  condition 
is  purely  personal,  not  directly  and  fundamentally  affecting  the  use 
or  occupancy  of  the  land  and  the  title  has  passed  from  the  grantee 
in  whose  deed  it  appears,  the  covenant  or  condition  may  be  ignored. 
In  cases  where  the  operation  of  a  covenant  or  condition  is  limited 
as  to  time,  the  same  may  be  ignored  after  the  expiration  of  the  time 
limit,  provided  there  has  occurred  no  breach ;  otherwise  the  same 
must  be  regarded  until  such  time  as  an  action  for  breach  is  barred 
by  the  Statute  of  Limitation,  the  period  of  limitation  being  five 
years  as  to  actions  to  recover  possession  of  real  estate,  four  years 
upon  an  obligation  created  by  an  instrument  in  writing,  and  two 
years  upon  an  obligation  not  created  in  writing.  In  many  cases  it 
will  be  found  on  investigation  that  upon  expiration  of  the  time  limit 
of  restrictions,  no  further  rights  of  grantors  or  third  persons  remain, 
and  the  covenant  can  be  ignored.     Each  case  must  be  governed  by 

50 


its  peculiar  circumstances.  In  cases  where  it  is  evident  from  the 
language  of  the  deed  and  from  surrounding  circumstances  or  other 
evidences  of  intent  that  no  general  plan  of  subdivision  or  improve- 
ment was  contemplated,  or  that  the  creator  of  the  restrictions  did 
not  intend  the  same  to  operate  in  favor  of  other  lands  held  by  him, 
a  quit  claim  deed  from  the  creator,  his  heirs  or  assigns,  will  clear 
the  title.  Not  so,  however,  if  it  be  ascertained  that  the  grantor  held 
out  to  the  world  by  representations,  inducements,  advertisements 
and  the  like  that  he  intended  the  same  as  a  part  of  a  general  plan 
of  improvement,  or  that  the  same  were  created  for  the  benefit  of  his 
remaining  land.  If  by  his  deed  it  appears  that  the  restrictions  were 
created  for  his  own  benefit  alone,  or  for  the  benefit  of  owners  of 
adjoining  lots,  or  lots  on  the  same  street,  or  the  like,  then  to  clear 
the  title  it  will  be  necessary  to  obtain  quit  claims  from  the  original 
grantor,  and  all  owners  of  lots  named  as  having  the  benefit. 
If  he  does  not  in  such  deed  limit  the  benefit  to  any  particular  lots, 
or  if  by  his  deed  he  gives  the  benefit  to  all  lots  in  terms,  then  quit 
claims  must  be  had  from  all  owners  in  the  tract  and  from  the 
original  grantor  even  if  he  be  not  then  an  owner.  As  said  before, 
each  case  must  ~be  determined  on  its  merits,  as  no  particular  set  of 
circumstances  can  apply  to  all  cases. 

This  final  word  may  be  said,  that  one  dealing  with  lands  is 
bound  by  any  actual  notice  of  such  facts  which  might  lead  to 
information  concerning  possible  restrictive  covenants  outside  of 
the  deed  submitted  to  him,  and  outside  of  the  record.  This  in 
practical  application  means  that  one  is  bound  to  inspect  the  property 
and  the  neighborhood.  If  he  receive  a  deed,  we  will  say  in 
Westmoreland  Place,  containing  no  restrictive  covenants,  and  there 
be  no  restrictive  covenants  in  any  deed  in  his  chain  of  title,  yet  he 
would  be  held  to  notice  of  such  restrictive  covenants  in  other  deeds 
by  the  very  character  of  the  property  and  its  surroundings.  He 
could  not  go  into  this  beautiful  place  where  the  houses  are  all  of 
permanent  and  costly  character,  all  set  on  a  certain  building  line, 
and  a  certain  distance  apart,  and  seeing  all  this  say  that  he  had  no 
notice  of  possible  restrictions,  simply  because  his  deed  did  not 
contain  a  reference  to  it. 

And  lastly,  do  not  advise  a  client  or  customer  that  restrictive 
covenants  are  void  when  there  is  no  time  limit  fixed  for  their 
expiration.  They  will  continue  so  long  as  there  is  a  reason  for 
their  enforcement,  and  the  Courts  will  hold  the  parties  to  their  valid 
contract. 


51 


IV. 

Descriptions  of  Land 


It  is  a  matter  of  astonishment  to  consider  the  number  of  deeds 
which  are  rendered  uncertain  or  void  by  reason  of  mis-description 
of  the  land  sought  to  be  conveyed.  One  would  naturally  think  that 
the  most  particular  care  would  be  exercised  when  the  parties  came 
to  determine  the  very  identity  of  the  thing  dealt  with.  In  nearly 
every  instance  the  exact  location  and  dimensions  of  the  land  con- 
veyed are  of  first  importance  to  the  parties ;  yet  the  cases  are  legion 
where  through  carelessness  or  ignorance  of  the  draftsman,  the  deed 
is  rendered  inoperative  by  errors  in  description,  while  the  deed  may 
be  otherwise  perfect.  Very  frequently  the  fault  arises  from  excess 
of  caution.  The  draftsman  in  seeking  to  more  fully  describe  the 
property  multiplies  words  and  attempts  two  or  more  descriptions 
which  may  be  repugnant  one  to  the  other,  and  in  his  attempt  to 
make  the  description  certain,  defeats  his  purpose  and  makes  the 
deed  uncertain  or  void.  Too  much  cannot  be  said  of  the  need  of 
care  in  framing  a  description.  It  should  be  that  any  one  can  read 
and  know  what  is  intended  from  the  instrument  itself.  A  court  has 
power  to  inquire  into  facts  and  circumstances  surrounding  latent 
defects  in  description.  That  is  to  say  in  cases  where  the  defect  is 
not  patent  or  apparent  from  the  face  of  the  deed  itself,  but  where 
it  is  necessary  to  determine  what  the  parties  intended  by  certain 
phrases  used.  This  evidence  the  courts  can  take  outside  of  the 
recitals  of  the  deed  itself,  but  even  courts  cannot  do  this  when  the 
defect  is  apparent  on  the  face  of  the  deed. 

The  law  makes  no  presumption  concerning  the  title  of  the 
grantee  under  his  deed.  He  holds  by  force  of  his  grant.  If  there  is 
anything  equivocal  in  the  language  of  the  grant  the  courts  can 
declare  its  interpretation.  But  if  the  parties  have  used  plain  and 
explicit  language — if  they  have  fixed  a  boundary  which  no  man  can 
mistake,  courts  have  nothing  to  say  by  way  of  interpretation. 
This  is  not  to  be  confused  with  the  power  which  courts  have  to 
ascertain  the  true  intent  of  the  parties  from  competent  evidence, 
and  in  cases  where  it  be  found  that  the  defect  or  misdescription 
occurred  through  mutual  mistake,  to  decree  a  reformation  of  the 
deed  to  carry  into  effect  the  true  intent  of  the  parties.  Thus,  if  I 
own  lot  one  and  sell  it,  and  by  mutual  mistake  my  deed  describes 

52 


lot  two,  the  defect  is  patent  or  apparent.  No  Court  can  say  that  by 
the  use  of  the  word  "two"  I  meant  lot  one.  But  the  Court  can  in  a 
proper  action  take  evidence  wholly  outside  of  the  deed  itself  that  it 
was  the  true  intent  to  describe  lot  one ;  that  the  error  occurred 
through  mutual  mistake  and  will  reform  the  deed  so  that  it  may 
read  lot  one  and  not  lot  two.  It  will  be  seen  therefore  that  most  of 
the  rules  of  construction  of  conveyances  laid  down  by  the  author- 
ities are  for  the  guidance  of  courts  in  interpretation,  and  where  the 
same  bear  upon  latent  defects  which  may  be  removed  or  explained 
by  evidence  other  than  the  instrument  itself  they  cannot  with 
safety  be  relied  upon  by  individuals  dealing  with  the  lands.  No 
individual  can  usurp  the  powers  of  the  Court.  When  a  Court  of 
competent  jurisdiction  has  construed  a  conveyance  in  accordance 
with  the  intent  of  the  parties  the  matter  is  settled,  and  thereafter 
the  words  of  the  Court  are  the  words  of  the  parties  themselves,  but 
the  grantee  or  one  dealing  with  him  before  such  judicial  determina- 
tion cannot  safely  rely  upon  the  rules  by  which  the  Court  reached 
its  decision. 

What  are  boundaries  is  matter  of  law,  but  where  they  are  is 
matter  of  fact.  This  discussion  will  therefore  be  confined  to  those 
rules  of  law  which  apply  strictly  to  the  intent  of  the  parties  as 
disclosed  by  the  instrument  itself  These  elemental  rules  of  con- 
struction, as  I  have  said,  are  the  only  ones  which  an  individual 
dealing  with  the  land  may  apply.  Where  he  seeks  to  determine  the 
intent  of  the  parties  by  any  other  evidence  he  does  so  at  his  own 
risk.  His  judgment  may  not  be  that  of  the  Court  if  the  deed  be 
assailed. 

It  is  a  cardinal  rule  of  construction  to  arrive,  if  possible,  at  the 
true  intent  and  meaning  of  the  parties  from  a  fair  consideration  of 
the  whole  instrument.  It  must  be  read  from  the  "four  corners"  and 
every  word  must  be  given  meaning  and  effect,  if  an  effect  can  be 
given  to  it  not  inconsistent  with  the  general  terms  of  the  whole 
instrument  when  taken  together.  As  pointed  out  the  grantee  and 
one  dealing  with  him  are  strictly  bound  by  that  intent  as  they  find 
it  in  the  words  of  the  instrument  itself. 

We  now  have  to  do  with  such  rules  as  apply  to  such  construc- 
tion. The  general  doctrine  as  to  boundary  by  physical  monuments 
is  tersely  stated  by  the  Supreme  Judicial  Court  of  Massachusetts 
as  follows : 

"Whenever  land  is  described  as  bounded  by  other  land,  or  by 
a  building,  or  structure,  the  name  of  which  according  to  its  legal 
or  ordinary  meaning  includes  the  title  in  the  land  of  which  it  has 
been  made  a  part ;  as  a  house,  a  wharf,  or  the  like,  the  side  of  the 
land  or  structure  referred  to  as  the  boundary  is  the  limit  of  the 

53 


grant,  but  where  the  boundary  line  is  simply  by  an  object,  whether 
natural  or  artificial,  the  name  of  which  is  used  in  ordinary  speech 
as  defining  a  boundary  and  not  as  describing  a  title  in  fee,  and  which 
does  not  in  its  description  or  nature,  include  the  earth  as  far  down 
as  the  grantor  owns — and  yet  which  has  width — as  in  the  case  of  a 
way,  a  river,  a  ditch,  a  wall,  a  fence,  a  tree,  or  a  stake — the  center 
of  the  thing  running  over  or  standing  on  the  land  is  the  line  of 
boundary  of  the  lot  granted." 

A  description  is  sufficient  by  which  the  identity  of  the  premises 
can  be  established ;  the  office  of  a  description  is  not  to  identify  the 
land  but  to  afford  means  of  identification,  and  when  this  is  done  it 
is  sufficient.  Thus  if  I  deed  the  "Malibu  Ranch"  this  is  a  means  of 
identification,  for  it  can  be  shown  that  I  intended  to  convey  a  parcel 
of  land  the  dimensions  and  area  of  which  could  be  determined  from 
sources  outside  the  grant.  It  is  not  necessary  that  I  literally  define 
the  boundaries,  for  it  can  be  identified  from  sources  outside  my 
deed,  but  a  careful  conveyancer  will  at  all  times,  if  possible,  give  an 
accurate  and  simple  description  of  the  premises  dealt  with,  rendering 
inquiry  aside  from  the  deed  unnecessary.  It  follows  that  where 
there  is  not  enough  in  the  deed  to  denote  upon  the  face  of  it  the 
particular  tract  intended  to  be  conveyed,  or  if  the  description  is  too 
vague  and  uncertain  for  identification  the  deed  is  void.  Thus  if  I 
describe  "a  lot  in  Los  Angeles,"  or  "a  tract  of  land  near  Santa 
Monica"  without  further  identification,  my  deed  will  be  void. 
In  the  hands  of  one  who  has  paid  a  consideration  and  who  can 
prove  that  I  intended  to  convey  a  particular  piece  of  property,  a 
Court  upon  proper  proceedings  would  reform  my  deed  to  truly 
describe  the  property,  but  this  is  only  in  the  cognizance  of  the 
Courts,  and  such  evidence  as  might  induce  a  Court  to  reform  the 
deed  cannot  with  safety  be  relied  upon  by  a  grantee,  or  those 
claiming  under  him,  without  such  judicial  determination.  However, 
if  the  tract  to  be  granted  appears  clearly  and  satisfactorily  from 
any  part  of  the  description,  the  addition  of  an}'-  false  circumstances 
of  description  may  be  disregarded,  and  if  enough  remain  to  identify 
the  particular  tract  intended  to  be  conveyed  the  deed  will  be 
operative. 

The  most  certain  boundaries  which  exist  are  those  by  natural 
objects  or  permanent  artificial  objects.  These  are  called  "monu- 
ments," and  when  aptly  made  the  boundaries  or  stations  in  the 
boundaries,  prevail  over  all  other  calls  in  the  deed.  Where  known 
monuments  are  referred  to  as  boundaries  or  stations  in  the  boundar- 
ies, they  must  govern,  though  courses,  distances,  angles  or  comput- 
ed contents  fail  to  correspond  with  such  boundaries.  Thus  if  a 
description  runs,  "North  45°  East  150  feet  to  the  intersection  of  the 

54 


center  lines  of  Figueroa  and  Tenth  Streets"  the  call  carries  us  to 
the  intersection  point,  although  it  be  North  30°  East  and  100  feet 
from  the  beginning  point.  Again  where  the  call  is  by  courses  along 
the  North  line,  we  will  say  of  Tenth  Street,  and  the  courses  do  not 
correspond  with  the  North  line  of  Tenth  Street,  the  line  of  the 
street  prevails. 

In  government  patents  it  is  the  rule,  where  land  is  bounded  by 
navigable  water,  to  describe  the  meandering  line  of  the  water  by 
courses  and  distances,  but  this  is  only  for  the  purposes  of  estimating 
the  amount  of  acreage  paid  for  by  the  patentee,  and  where  the 
water,  or  any  particular  line  of  the  water  is  referred  to  as  the 
boundary,  the  courses  and  distances  may  be  disregarded  for  the 
water  itself,  or  the  line  of  the  water  itself,  at  any  instant  of  time 
is  the  true  boundary. 

Again,  where  the  description  was  beginning  298  feet  from  the 
intersection  of  two  streets,  at  middle  of  a  wall,  the  wall  must  be 
considered  the  initial  point  though  it  be  but  293  feet  from  the 
intersection  of  the  streets.  Where  grant  was  made  of  120  feet  on  a 
certain  street  "including  a  stable  situate  on  the  rear  of  the  premises," 
and  to  include  the  stable,  the  lot  should  be  131  feet,  the  deed  conveys 
131  feet.  This  rule  is  modified  where  there  is  a  doubt  as  to  what 
monument  was  intended,  in  which  case  courses  and  distances  may 
be  consulted  to  ascertain  the  true  intent.  Thus  in  the  case  above 
cited  if  there  be  two  barns  on  the  rear  of  the  premises,  one  120  feet 
from  the  beginning  point  and  one  131  feet  from  that  point,  the  call 
for  120  feet  would  govern. 

A  particular  description  controls  and  renders  certain  a  general 
description.  Thus,  if  I  describe  the  property  as  "Lot  A,"  and  follow 
this  with  a  mete  and  bound  description  which  describes  more  than 
"Lot  A,"  if  I  own  what  is  particularly  described,  the  mete  and  bound 
description  prevails,  and  the  statement  that  I  convey  "Lot  A"  is  not 
conclusive. 

Where  the  deed  contains  two  descriptions  equally  explicit,  but 
there  exists  a  repugnance  between  them,  that  description  prevails 
which  the  whole  instrument  shows  to  have  been  the  intent  of  the 
parties.  Where  each  description  is  of  equal  authority,  that  one 
must  be  adopted  which  is  most  favorable  to  the  grantee. 

There  are  cases  where  a  general  description  will  prevail  over  a 
particular  one,  as  for  instance  if  a  general  description  is  followed 
by  a  mete  and  bound  description  which  is  clearly  erroneous,  the 
general  one  will  prevail.  I  convey  the  S.  E,  ^  of  a  section  contain- 
ing one  hundred  and  sixty  acres,  and  so  describe  it.  I  follow  this 
with  a  particular  description  which  only  describes  eighty  acres 
The  first  description  prevails  and  the  second  may  be  ignored. 

55 


If  a  general  description  be  definite  and  certain  in  itself,  and  a 
particular  description  uncertain  and  indefinite  the  general  one  pre- 
vails. Where  there  are  two  descriptions,  one  of  which  describes 
the  property  by  name  or  lot  number,  and  the  other  particularly  by 
metes  and  bounds,  which  is  erroneous  and  does  not  cover  all  the 
land  described  in  the  first,  the  latter  must  be  rejected. 

A  conveyance  by  metes  and  bounds  of  land  in  the  N.  E.  ^  of  a 
section  where  the  monuments  called  for  are  fixed  and  certain  is  not 
vitiated  by  the  statement  that  the  land  is  in  the  S.  E.  j4  oi  the 
section. 

If  a  grant  contains  different  descriptions,  one  of  which  applies 
to  land  which  grantor  owns  and  the  other  to  land  which  he  does  not 
own,  the  former  shall  be  taken  as  true  and  the  latter  as  false. 

A  grant  by  metes  and  bounds  describing  accurately  a  certain 
tract,  the  description  followed  by  words,  "being  an  undivided  one- 
half"  of  a  certain  larger  tract  conveys  an  undivided  half  of  the  whole 
tract  and  the  mete  and  bound  description  shall  be  disregarded. 

If  there  be  two  clauses  which  are  inconsistent  with  each  other 
and  they  cannot  be  reconciled,  the  first,  if  it  be  complete  in  itself, 
prevails,  but  if  further  matter  of  description  is  added  which  modifies 
and  colors  what  precedes  it,  it  is  not  rejected  as  repugnant,  but  the 
whole,  if  possible,  is  to  be  construed  together. 

Courses  laid  down  which  are  repugnant  to  the  remainder  of 
the  description  may  be  rejected  if  the  remainder  is  sufficient  and 
consistent  to  uphold  the  grant  according  to  the  evident  intention 
of  the  parties. 

Where  a  description  contains  false  and  true  statements,  if  the 
true  are  sufficient  to  identify  the  land  the  false  may  be  rejected. 
The  statement  as  to  area  is  not  controlling,  except  where  the  grant 
is  by  area  alone  as  "South  10  acres"  of  a  particular  tract  without 
qualification.  This  part  of  a  description  is  the  last  to  be  resorted  to ; 
but  where  the  description  equally  admits  of  two  constructions,  one 
of  which  would  make  the  quantity  agree  with  that  stated  in  the 
grant,  while  the  other  would  not,  the  former  must  prevail. 

It  is  well  to  observe  here  that  unless  the  sale  is  made  at  so 
much  per  acre  or  so  much  per  front  foot,  the  dimensions  to  be 
determined,  the  buyer  cannot  complain  if  there  be  a  shortage,  nor 
the  seller,  if  there  be  an  excess  when  the  true  dimensions  are 
discovered.  One  buys  land  in  a  parcel  or  lot  as  he  buys  any  other 
physical  thing  which  he  can  see  and  examine  for  himself.  The 
statement  of  a  seller  that  his  tract  contains  so  many  acres,  or  his 
lot  has  so  many  feet  frontage,  is  immaterial  if  the  bargain  be  not 
made  on  that  basis.  The  statement  of  a  surveyor  made  on  a  map  as 
to  area  or  dimensions  is  not  controlling.     It  is  overcome  by   the 

56 


actual  measurements  on  the  ground  as  established  by  monuments, 
courses  and  distances.  It  is  encumbent  upon  one  dealing  with 
lands  to  ascertain  if  possible  the  location  of  the  original  monuments. 
In  Los  Angeles,  most  of  the  monuments  established  by  Ord  and 
Hancock  have  been  obliterated,  if  indeed  they  were  ever  set.  Owing 
to  the  well  known  inaccuracies  of  these  surveys,  the  Supreme  Court 
of  this  State  has  held  that  the  lines  of  buildings  and  improvements 
long  established  must  be  taken  as  the  true  lines  of  the  original 
survey. 

It  is  a  sound  rule  that  a  perfect  description  which  fully  describes 
the  property  is  not  to  be  defeated  by  the  addition  of  a  further  and 
false  description  and  by  words  added  out  of  extra  caution  which 
have  no  tendency  to  make  a  general  description  uncertain.  Thus  a 
deed  accurately  describing  land  by  proper  Section,  Township  and 
Range  which  actually  lies  in  Los  Angeles  County  is  not  void  by 
reason  that  it  is  falsely  stated  that  it  lies  in  Kern  County. 

The  law  will  construe  that  part  of  a  deed  to  precede  which 
ought  to  take  precedence  in  whatever  part  of  the  instrument  it  may 
in  fact  be.  Words  cannot  be  transposed  unless  there  is  something 
in  the  deed  itself  which  shows  that  reading  the  deed  as  it  is  will 
defeat  the  intention  and  that  by  transposing  words  and  sentences 
the  true  intent  will  be  found  though  badly  expressed.  When  all 
other  means  fail  and  a  doubt  still  remains,  that  construction  must 
prevail  which  is  most  favorable  to  the  grantee,  and  this  has  been 
held  to  be  true  even  in  grants  from  the  State ;  the  same  being  as  to 
description  governed  by  the  same  rules  as  those  between  indi- 
viduals. It  must  be  remembered  that  in  grants  from  the  United 
States  or  from  the  State  of  California  the  intendments  are  in  favor 
of  the  grantor  while  between  individuals  they  are  in  favor  of  the 
grantee.  It  would  appear  from  some  authority  that  this  doctrine 
as  to  strict  construction  of  statutory  requirements  does  not  apply 
to  descriptions. 

Where  a  description  is  followed  by  an  exception  which  is 
uncertain,  the  exception  may  be  void  for  uncertainty,  but  the 
description  will  stand,  as  for  instance  a  grant  of  S.  W.  ^4  of  a 
section  "except  one  acre."  If  there  be  nothing  in  the  chain  to  put 
a  prudent  purchaser  on  inquiry  as  to  the  particular  acre  intended  to 
be  excepted  the  whole  passes  and  the  exception  is  void. 

There  may  be  an  exception  out  of  an  exception  and  the  part 
secondly  excepted  will  pass.  As  "except  the  South  ten  acres," 
except  "that  part  North  of  the  fence."  Here  "that  part  North  of 
the  fence"  passes  by  the  deed. 

It  is  very  important  to  observe  if  the  description  refers  to  any 
other  deed  or  to  a  map  or  a  survey  for,  if  it  does  so,  this  has  the 

57 


effect  to  incorporate  in  the  deed  the  instrument  referred  to  as  fully 
as  if  it  were  copied  verbatim  in  the  deed,  and  what  is  described  in 
the  instrument  referred  to  will  pass.  Thus  a  deed  describing  the 
land  by  courses  and  distances,  with  the  addition  of  the  words, 
"being  the  same  premises  described  in  a  deed  from  'A',"  was  held 
to  convey  the  whole  premises  in  that  deed,  though  a  small  strip 
was  omitted  in  the  mete  and  bound  description. 

It  is  important  to  examine  all  maps  and  surveys  to  which 
reference  may  be  made,  as  frequently  the  map  will  show  matters 
as  to  rights  of  way,  easements,  building  lines  and  the  like  which  are 
not  disclosed  by  the  deed  itself.  Remember  that  everything  referred 
to  in  the  deed  is  of  the  same  import  as  if  it  were  described  in  terms. 
This  is  of  great  importance  and  a  point  that  cannot  be  too  strongly 
emphasized. 

Much  confusion  arises  from  misuse  of  terms  of  direction. 
The  amateur  in  framing  description  is  unable  to  distinguish  the 
difference  between  "North"  and  "Northerly."  The  rule  is  simple 
and  when  intelligently  applied  there  can  no  confusion  arise.  The 
terms  "Northerly,"  "Easterly,"  etc.,  when  used  without  qualification 
and  without  reference  to  monuments  are  to  be  construed  as  mean- 
ing due  "North,"  due  "East,"  etc.,  and  the  terms  "North,"  or  "East," 
etc.,  when  controlled  by  other  well  defined  description  or  monu- 
ments will  be  read  "Northerly"  or  "Easterly,"  etc.  By  statute  in 
this  State  the  words  "North,"  etc.,  denote  true  courses  and  refer  to 
true  meridian  unless  otherwise  declared.  The  variation  of  the 
magnetic  needle  from  the  true  meridian  is  approximately  15  degrees 
in  this  locality.  All  descriptions  by  metes  and  bounds  should  be 
thus  qualified. 

All  lines  between  monuments,  unless  qualified,  are  to  be  taken 
as  straight  lines,  and  the  actual  measurement  between  monuments 
prevails  over  statement  as  to  distance. 

Boundary  lines  may  be  established  by  agreement  of  owners. 
This  may  be  done  only  where  the  description  of  the  boundary  line 
is  indefinite  and  uncertain  and  parties  to  the  agreement  own  on 
both  sides  of  the  agreed  line.  Not  so,  however,  when  the  descrip- 
tion of  the  boundary  line  is  certain,  for  no  subsequent  agreement 
will  vary  the  terms  of  the  grant  and  title  to  land  does  not  pass  by 
agreement.  While  actual  title  cannot  pass  by  agreement,  yet  where 
the  parties  have  agreed  upon  a  certain  line  as  being  the  original 
line  intended  as  the  boundary,  they  are  estopped  by  their  agreement 
to  assert  the  contrary. 

Unless  there  be  contrary  intent  expressed  all  grants  bounding 
on  a  natural  pond  or  lake  extend  to  ordinary  line  of  low  water 
mark ;  on  navigable  streams  and  tide  waters  to  line  of  ordinary  high 

58 


water  mark.  The  same  rules  hereafter  noted  as  to  meandered  lines 
and  shifting  boundaries  apply  here.  When  a  range  of  hills  is  the 
boundary  the  summit  line  is  the  true  boundary  unless  otherwise 
expressed.  The  mouth  of  a  stream  where  it  empties  into  another 
stream  is  the  point  of  intersection  of  center  lines ;  where  it  empties 
into  a  natural  lake,  or  into  tide  waters  at  point  of  intersection  of  its 
center  line  with  the  line  of  ordinary  low  water,  or  ordinary  line  of 
high  water  mark,  as  the  case  may  be. 

When  the  boundary  is  by  a  stream  not  navigable  or  by  a  public 
highway,  the  title  conveyed  extends  to  the  center  of  such  stream  or 
highway  unless  a  contrary  intention  is  clearly  manifest  from  the 
grant  itself;  and  this  rule  is  applicable  when  the  land  conveyed  is  a 
fractional  government  subdivision,  or  any  government  lot,  or  any 
lot  designated  on  a  plat  by  number  or  otherwise  and  shown  by  the 
plat  to  abut  a  public  way  or  an  innavigable  stream.  Now  the  ques- 
tion of  intent,  here,  to  be  gathered  from  the  instrument,  is  frequently 
a  close  one.  It  is  of  the  highest  importance  that  such  descriptions 
be  subjected  to  the  closest  scrutiny  as  will  be  shown  later  in 
discussion  of  subjects  of  shifting  boundaries  and  vacation  of  high- 
ways. It  must  be  borne  in  mind  that  government  "meander"  lines 
are  run,  not  for  the  purpose  of  accurately  fixing  boundary  lines  upon 
the  ground,  but  to  determine  the  acreage  granted  and  to  be  paid  for 
by  the  purchaser.  Hence,  when  the  meander  calls  are  run  with 
reference  to  a  stream,  or  a  body  of  water,  even  though  the  courses 
do  not  exactly  agree  with  the  course  of  the  stream,  or  the  water 
line,  and  monuments  be  set  at  considerable  distance  from  the  water 
line,  the  thread  of  the  stream,  or  the  body  of  the  water  will  yet  be 
the  true  boundary.  Where  the  call  is  say,  "on  the  East  by  Tule 
Creek"  the  thread,  or  center  line  of  the  stream  at  any  instant  of 
time  is  the  boundary.  W^here  the  land  is  shown  by  plat  to  be 
bounded  by  a  stream  and  grant  is  made  with  reference  to  the  plat 
the  boundary  is  the  thread  of  the  stream.  If,  however,  meander 
lines  are  run  without  reference  in  terms  to  the  stream,  and  there  is 
no  accompanying  map  to  show  that  the  meander  line  is  intended  to 
be  in  fact  the  water  line,  then  the  stream  must  be  deemed  to  be 
excluded,  and  the  grantee  is  confined  to  the  exact  line  of  the  survey. 

It  is  the  general  rule  of  law,  founded  on  public  policy,  that 
proprietors  in  the  absence  of  intent  to  the  contrary  expressed  in 
grants  to  them,  shall  own  to  the  center  of  all  bordering  innavigable 
streams  and  public  ways.  It  is  of  the  first  importance  to  know  what 
construction  courts  have  put  upon  words  denoting  intent.  In  the 
absence  of  any  reason  to  the  contrary  the  grantor  will  be  held  not 
to  have  reserved  anything  that  could  be  of  no  great  value  to  him, 
but  which  could  be  of  great  value  to  his  grantee,  and  courts  are 

59 


alert  to  give  every  advantage  in  construction  to  uphold  this  doc- 
trine ;  but  no  rule  of  construction  or  sympathy  of  court  can  alter 
the  effect  of  words  or  terms  which  in  their  ordinary  and  accepted 
sense  are  plainly  and  unequivocally  those  of  exclusion.  It  is  there- 
fore held  that  where  the  call  is  by  the  "margin,"  "the  edge,"  "the 
bank,"  "the  side,"  or  "East  line  of,"  "outer  line,"  "near  line,"  and 
the  like,  the  grantee  does  not  take  to  the  thread  of  the  stream,  but 
is  stopped  at  the  monument  called  for.  However,  such  terms  as 
"bounded  by,"  "running  along,"  "with  the  stream,"  "running  by," 
"to  the  line  of  the  stream,"  "with  the  meander  line,"  "fronting  on," 
"lying  along,"  "abutting  on,"  and  the  like  are  those  of  inclusion  on 
the  principle  that  where  a  natural  monument  is  called  for  without 
expression  of  intent  to  the  contrary,  the  call  goes  to  the  center  of 
the  monument.  If  the  stream  by  any  apt  words  of  inclusion  is 
made  the  monument,  the  call  goes  to  the  center ;  but  if  apt  words 
of  exclusion  be  used,  and  a  certain  line  of  the  stream  be  called  for, 
the  line,  not  the  stream  is  the  monument.  The  importance  of  this 
distinction  is  manifest  when  change  occurs  in  the  location  of  the 
Avater  boundary.  In  cases  where  the  parties  must  be  held  to  have 
determined  upon  a  fixed  and  certain  line  of  boundary  other  than 
the  body  of  the  water  itself,  the  boundary  line  is  not  affected  by 
the  shifting  in  location  of  the  body  of  the  water.  In  cases,  however, 
where  the  boundary  is  the  body  of  the  water  itself,  without  restric- 
tion to  the  contrary,  the  title  follows  the  shifting  boundary  if  the 
change  be  from  natural  causes  and  by  slow  and  imperceptible 
degrees.  Where  the  change  occurs  from  artificial  causes  or  from 
sudden,  abrupt  natural  causes,  as  by  flood  or  tidal  waves  or  earth- 
quake, no  change  occurs  in  line  of  boundary  in  the  eyes  of  the  law. 
In  cases  where  land  is  added  either  by  the  accretion  of  alluvion 
or  reliction  of  the  water  from  natural  causes  by  slow  and  imper- 
ceptible degrees,  examination  of  all  grants  in  the  chain  of  title, 
occuring  from  time  to  time  during  the  process  must  be  made  to 
ascertain  in  what  manner  the  added  land  has  been  dealt  with. 
By  the  common  law  lands  so  added  become  the  property  of  the 
upland  owner  on  the  theory  that  by  reason  of  his  riparian  owner- 
ship he  should  profit  by  the  addition  as  he  would  suffer  loss  if  the 
water  encroached  upon  his  lands ;  and  upon  the  further  theory  that 
being  deemed  to  have  purchased  his  upland  with  a  view  to  the 
peculiar  advantages  to  him  from  water  frontage,  he  should,  as  a 
matter  of  right,  continue  a  riparian  owner,  when  land  is  formed 
between  his  upland  and  the  water's  edge,  as  changed.  The  common 
law  has  been  adopted  in  some  jurisdictions  and  modified  in  others 
by  statute,  as  each  state  may  as  sovereign  declare  what  these  rights 
of  riparian  owners  shall  be,  and  all  courts,  State  and  Federal,  are 

60 


bound  by  these  statutes.  The  U.  S.  Circuit  Court  of  Appeals,  in 
Western  Pacific  Railway  vs.  S.  P.  Co.,  151  Fed.  400,  holds  that 
since  the  adoption  of  the  codes  this  common  law  rule  is  abrogated 
in  this  State  so  far  as  the  same  applies  to  shores  other  than  those 
of  rivers  and  streams.  It  must  be  conceded  then,  that  until  the 
statutes  are  amended,  or  until  the  decision  in  said  case  is  overruled 
that  the  upland  owner  whose  boundary  line  is  fixed  and  certain 
gains  nothing  in  this  State  by  reason  of  accretion  except  he  be 
riparian  to  a  river  or  stream.  But  it  may  be  argued  that  this  is  not 
true  where  his  boundary  is  the  line  of  the  water  itself,  for  it  is  a 
shifting  boundary,  and  title  to  added  lands  is  acquired,  not  by  the 
law  of  accretion  which  gives  the  upland  proprietor  ownership  by 
reason  of  his  grant,  and  its  peculiar  location,  but  by  the  description 
in  the  grant  itself  which  includes  such  added  lands.  The  grantee 
bounding  on  the  line  of  the  water  and  not  restricted  to  the  fixed 
line,  is  the  owner  at  all  times  to  the  line  of  his  boundary  wherever 
it  may  be  at  any  moment  of  time.  There  must  be  lands  added  in 
fact  to  invoke  any  rule  of  law.  That  rule  is  invoked  which  the 
descriptive  words  of  the  grant  make  applicable.  If  the  boundary 
line  by  the  description  is  fixed,  without  reference  to  the  line  of  the 
water  itself,  the  law^  of  accretion  applies ;  if  it  be  the  line  of  the 
water  itself,  the  law  of  boundary  applies.  There  is  such  a  thing  as 
a  movable  freehold  and  it  has  been  said  by  the  U.  S.  Supreme  Court 
that  a  water  line,  though  it  may  gradually  and  imperceptibly 
change,  is  just  as  fixed  a  boundary  in  the  eyes  of  the  law  as  a 
street  or  wall.  In  grants  of  such  added  lands  it  is  the  rule  that 
where  the  water  line  is  the  boundary  and  there  be  no  contrary 
intent  expressed,  the  deed  by  the  original  description  carries  such 
added  lands  without  special  designation,  upon  the  theory  before 
expressed,  that  in  cases  where  such  lands  be  added  from  natural 
causes,  by  slow  and  imperceptible  degrees,  the  boundary  line  of  the 
original  grant  is  extended  to  embrace  them.  This  is  not  true, 
however,  in  cases  where  the  original  line  of  boundary  is  fixed. 
Here  the  upland  owner  takes  by  law  of  accretion  and  the  added 
lands  become  a  part  of  his  holdings,  but  under  different  designation 
and  title.  In  grants  of  such  holdings  the  added  lands  must  be 
specifically  described  to  pass,  as  land  does  not  pass  as  appurtenant 
to  land. 

By  statute  in  this  State  islands  and  accumulations  of  land 
formed  in  the  bed  of  streams  which  are  navigable  belong  to  the 
State,  if  there  is  no  title  or  prescription  to  the  contrary  ;  if  formed 
in  a  stream  not  navigable  the  same  belongs  to  the  owner  of  the  shore 
on  that  side  where  the  island  or  accumulation  is  formed ;  or  if  not 
formed  on  one  side  only,  to  the  owners  of  the  shores  on  the  two 

61 


sides  divided  by  an  imaginary  line  drawn  through  the  center  of  the 
stream.  The  rule  of  construction  fixed  in  this  State  by  statute  is 
that  where  tidewater  is  the  boundary  the  rights  of  grantor  to 
ordinary  high  water  mark  are  included  in  the  conveyance.  When 
a  navigable  lake,  where  there  is  no  tide,  is  the  boundary,  the  rights 
of  the  grantor  to  low  water  mark  are  included  in  the  conveyance ; 
but  in  following  this  rule  the  distinction  between  fixed  and  shifting 
boundaries  must  be  borne  in  mind.  By  statute  likewise  in  this 
State,  where  a  road  or  stream  of  water  not  navigable  is  the  bound- 
ary the  rights  of  the  grantor  to  the  middle  of  the  road,  or  the, thread 
of  the  stream,  are  included  in  the  conveyance,  except  where  the  road 
or  thread  of  the  stream  is  held  under  another  title. 

We  now  come  to  consider  the  subject  of  boundary  by  a  public 
way.     Section  831  C.  C.  declares : 

"An  owner  of  land  bounded  by  a  road  is  presumed  to  own  to 
the  center  of  the  way,  but  the  contrary  may  be  shown." 

And  Section  1112  C.  C.  declares: 

"A  transfer  of  land  bounded  by  a  highway  passes  the  title  of 
the  person  w^hose  estate  is  transferred  to  the  soil  of  the  highway  in 
front  to  the  center  thereof,  unless  a  different  intent  appears  from 
the  grant." 

In  some  of  the  states  the  ownership  of  lands  in  public  ways  is 
arbitrarily  fixed  by  statute  for  reasons  of  public  policy.  By  statute 
in  this  State  the  public  acquires  but  an  easement  whether  by  deed, 
dedication,  or  condemnation.  Now  the  grantor  of  land  adjoining 
a  public  way  is  presumed  to  grant  the  fee  to  the  center  of  the  way 
unless  a  contrary  intent  appear  in  the  deed ;  and  again,  the  pre- 
sumption that  the  grantor  takes  to  the  center  does  not  obtain  if  his 
grantor  did  not  in  fact  own  the  fee  to  the  center  of  the  way ;  for  the 
law  will  not  presume  that  the  grantor  intended  to  convey  that  which 
he  did  not  own.  When  the  conveyance  in  terms  conveys  soil  in  the 
highway  there  is  of  course  no  question,  for  in  such  case  the  grantee 
takes  by  the  very  terms  of  the  grant ;  but  where  same  is  not 
included  in  the  description  in  terms,  and  there  be  nothing  in  the 
deed  to  indicate  that  .it  is  not  grantor's  intention  to  convey  to  the 
center  of  the  way,  the  law  presumes  he  did  so  intend,  and  gives  the 
fee  to  the  soil  in  the  street  to  his  grantee  by  reason  of  his  grant  and 
peculiar  location,  and  for  reasons  of  public  policy.  It  will  not  be 
presumed  in  absence  of  words  indicating  clear  and  unmistakable 
intent  to  the  contrary  that  grantor  intended  to  reserve  that  which 
could  be  of  no  practical  use  to  him,  as  I  shall  presently  show  that 
even  if  he  retain  the  fee  in  the  w^ay  and  the  way  be  abandoned  he 
cannot  use  the  land  to  the  detriment  of  his  grantee. 

The  construction   placed   upon   words   indicating  an   intent   to 

62 


exclude  any  portion  of  the  way  is  highly  important ;  particularly 
when  the  way  be  vacated.  The  same  rules  which  apply  to  boundar- 
ies on  waters,  (except  shifting  boundaries),  apply  here.  Where 
the  call  is  a  certain  line  of  the  street  as  the  "East  line,"  the  fee  to 
the  land  in  the  street  will  not  pass,  but  where  the  call  is  to  the  lot 
line,  though  it  be  in  fact  the  East  line  of  the  street;  or  where  it  is  to 
the  East  line  of  the  street  and  thence  along  the  street,  or  street 
line,  or  line  of  the  lot  the  fee  to  the  center  will  pass,  even  though  the 
call  for  distance  is  insufficient  to  carry  to  center  line  of  the  street. 
It  must  be  remembered  that  all  intendments  here  are  taken  most 
strongly  in  favor  of  the  grantee  and  the  language  must  be  clear  and 
explicit  to  justify  the  reservation  of  any  part  of  the  way.  Often,  in 
cases  where  the  way  has  been  widened,  there  occurs  after  an  other- 
wise definite  description  some  such  clause  as:  "Except  the  South 
10  feet  within  the  lines  of  First  Street."  Here  is  a  clear  exception 
of  the  land  itself,  and  the  fee  will  not  pass ;  but  where  by  any  reason- 
able construction  it  can  be  determined  that  it  was  the  intent  to 
except  the  easement  for  the  way  the  fee  will  pass  as :  "except  the 
South  10  feet  taken  for  First  Street,"  or  "to  be  used  as  a  street,"  or 
"deeded  for  First  Street,"  or  the  like.  It  should  be  borne  in  mind 
that  the  act  of  vacation  of  a  public  way  confers  no  title.  There  is 
no  reversion.  If  the  deed  to  the  abutting  land  owner  is  sufficient 
to  vest  in  him  the  title  to  land  in  the  way  before  vacation,  it  rests  in 
him  after  the  vacation,  freed  of  the  burden  of  the  easement.  It  is  a 
part  of  his  original  holding  but  by  a  different  designation ;  hence 
the  grant  of  land  abutting  a  public  way  after  vacation  of  the  way, 
does  not  pass  title  to  land  formerly  in  the  way  without  specific 
description  of  the  same.  It  was  never  any  part  of  the  lot  and  the 
lot  lines  are  not  extended  by  the  act  of  vacation  to  embrace  it. 

The  abutting  owner  has  a  peculiar  right  in  the  way  distinct 
from  that  of  the  public,  whether  he  own  the  fee  in  the  way  or  not; 
and  this  is  a  property  right  of  which  he  cannot  be  deprived  without 
due  process  of  law  and  compensation  to  him.  If  the  public  use  of 
the  way  be  terminated  by  vacation,  the  abutting  owner  still  has  the 
right  of  ingress  and  egress  over  the  way  if  the  fee  thereof  be  in  his 
grantor,  even  if  the  abutting  owner  consents  to  the  vacation  and  his 
grantor  cannot  after  vacation  exercise  dominion  over  the  strip  for- 
merly in  the  street  in  derogation  of  his  grantee's  right.  Thus,  if  the 
grantor  owns  the  fee  to  all  the  land  in  the  way,  and  a  new  way  be 
opened  adjoining  the  old, — the  West  line  of  the  new  way,  we  will 
say,  being  the  East  line  of  the  old, — the  abutting  owner  of  lands 
adjoining  the  old  way  on  the  West,  has  yet  his  easement  over  the 
old  way  to  reach  the  new,  and  the  owner  of  the  fee  cannot  build 
upon  his  land  in  the  old  way,  or  otherwise  exercise  dominion  over 

63 


it  to  prevent  the  exercise  of  this  right.  This  is  not  true  where  the 
grantor  owned  but  half  the  land  in  the  way,  for  the  lot  owner  cannot 
by  simply  consenting  to  vacation  acquire  rights  in  the  land  of  a 
stranger.  In  any  case  his  rights  are  confined  to  the  lands  in  the 
vacated  way  owned  by  his  grantor.  He  cannot  claim  right  to  cross 
lands  of  another  to  reach  the  new  way.  If  he  be  cut  off  from  access 
to  a  public  way  by  reason  of  vacation  of  the  old  way  he  cannot  be 
heard  to  complain,  for  he  has  consented  to  the  vacation  and  the  law 
will  presume  the  intended  consequences  of  his  own  act.  It  is  possible 
to  deprive  the  abutting  owner  of  all  his  rights  in  the  way,  public  and 
private,  by  due  process  of  law  and  upon  compensation  and  he  may 
be  cut  off  from  access  to  any  way  if  the  proceedings  be  sufficient 
and  he  be  given  an  opportunity  to  demand  compensation,  for  the 
compensation  may  extend  to  the  full  value  of  his  property.  It  is 
not  necessary  that  he  be  in  fact  compensated  if  he  be  given  an 
opportunity  to  be  heard  and  demand  compensation.  If  this  be  not 
done,  vacation  is  not  effected  as  to  him,  and  he  has  the  same  use  of 
the  way  as  formerly,  whether  he  own  any  fee  in  the  way  or  not  and 
despite  the  fact  that  the  public  use  is  terminated.  An  interesting 
monument  to  this  principle  in  shape  of  a  crumbling  adobe  wall 
stands  near  the  Plaza  in  this  city.  An  attempt  was  made  by  the 
municipal  authorities  to  vacate  Negro  Alley,  but  the  proceedings  so 
far  as  they  concerned  Ballerino  were  insufffcient  to  accomplish  this. 
Los  Angeles  Street  was  opened  to  the  west  of  Negro  Alley,  leaving 
a  narrow  wedge  of  land  owned  by  Bigelow  between  the  new  street 
and  Negro  Alley.  Ballerino  owned  land  on  east  side  of  Negro 
Alley.  He  promptly  acquiesced  in  the  vacation,  claiming  a  frontage 
on  the  new  street  corresponding  to  that  which  he  enjoyed  on  Negro 
Alley.  Acting  upon  this  claim  he  encroached  upon  that  part  of 
Negro  Alley  and  the  Bigelow  strip  lying  between  his  side  lines 
extended  west  to  Los  Angeles  Street.  Bigelow  brought  suit  to 
quiet  title,  conceding  the  ownership  of  Ballerino  in  the  east  half 
of  Negro  Alley.  When  Ballerino  discovered  that  the  proceedings 
in  vacation  were  insufficient  as  to  him  he  repented  of  his  act  of 
consent,  and  the  court  found  he  had  not  waived  his  right  to  com- 
pensation as  he  was  not  acting  with  knowledge  of  his  rights. 
Held,  that  Ballerino  is  entitled  to  all  the  rights  he  formerly  enjoyed 
in  Negro  Alley,  among  which  is  included  his  easement  in  the  piece 
of  land  which  is  a  part  of  Negro  Alley  claimed  by  Bigelow,  and  the 
right  to  have  the  same  kept  open.  Though  the  fee  in  that  piece  is 
declared  to  be  in  Bigelow  he  is  not  entitled  to  exercise  dominion 
over  it  in  derogation  of  rights  of  Ballerino. 

In   computing  the  area  owned   by  an   abutting  owner  in   an 
adjoining  way  which  has  been  vacated  the  lines  must  be  drawn  at 

64 


right  angles  to  his  frontage  to  conform  to  Sec.   1112  C.  C.  which 
declares  that  he  own  to  the  center  of  the  way  in  front  of  his  lot. 

Cases  are  found  where  the  map  of  a  subdivision  contain  the 
statement  that  the  area  of  lots  is  computed  to  street  centers. 
Where  grants  of  fractional  portions  of  such  lots  are  found,  the 
construction  must  be  that  the  lot  is  the  parcel  bounded  by  the 
exterior  lot  lines  shown  on  the  map,  and  the  statement  on  the  map 
as  to  area  must  be  disregarded,  unless  the  grant  itself  in  terms, 
includes  the  land  in  the  street.  A  simple  reference  to  the  map  is 
not  sufficient.  While  such  reference  incorporates  the  whole  map  in 
the  grant  the  statement  as  to  computation  of  area  shown  thereon 
does  not  have  the  effect  to  extend  lot  lines.  They  must  remain  as 
delineated.  Great  care  must  be  exercised  in  such  cases  and  all 
grants  of  parts  of  the  lot  from  the  common  grantor  examined  for 
possible  conflicts.  For  example,  a  grant  of  east  half  of  a  twenty- 
acre  lot,  where  reference  is  made  to  map  which  states  that  area  is 
computed  to  center  of  adjoining  streets,  and  description  be  further 
unqualified,  conveys  the  east  half  of  the  parcel  inside  the  lot  lines, 
and  does  not  convey  ten  acres.  In  like  case,  a  deed  of  east  ten  acres 
conveys  more  than  the  east  half.  Descriptions  beginning  on  the 
line  of  such  a  lot  a  certain  distance  from  the  corner  of  the  lot  must 
be  construed  as  beginning  that  distance  from  the  intersection  of  lot 
lines  and  not  from  intersection  of  street  center  lines.  The  grant 
itself  must  disclose  the  intent  to  compute  acreage  to  street  centers 
or  that  result  will  not  be  accomplished.  Any  clear  expression  of 
such  intent  will  serve  as  "acreage  computed  to  center  of  adjoining 
street,"  or  the  like. 

No  general  rule  can  be  laid  down  for  construction  of  exceptions 
and  reservations  in  grants.  Each  case  must  be  considered  alone. 
To  properly  construe  such  clauses  every  word  must  be  weighed, 
every  shade  of  meaning  considered  and  every  part  of  the  grant 
carefully  scanned.  The  books  are  filled  with  decisions  of  the 
Courts  upon  disputed  construction  of  such  clauses  and  some  of  the 
finest  learning  in  the  law  bears  upon  the  question.  Any  appropriate 
words  as,  "except,"  "besides,"  "saving,"  and  the  like,  which  clearly 
indicate  the  intent,  will  be  sufficient  to  create  an  exception.  So  an 
exception  may  be  made  in  the  form  of  a  reservation,  or  reservation 
in  form  of  an  exception.  An  exception  in  a  grant  withholds  from 
its  operation  some  part  or  parts  of  the  thing  which,  but  for  the 
exception,  would  pass  by  the  general  description  to  the  grantee. 
A  reservation,  on  the  other  hand,  is  the  creation  of  some  new  right 
issuing  out  of  the  thing  granted,  and  which  did  not  exist  before  as 
an  independent  right  in  behalf  of  the  grantor.  In  distinguishing 
between  a  reservation  and  an  exception  the  words  "reserving"  and 

65 


"excepting"  are  not  conclusive  in  determining  which  is  intended. 
The  character  and  effect  of  the  provision  itself  must  determine 
what  is  intended.  If  the  intent  of  the  deed  is  to  vest  in  the  grantor 
some  new  right  or  interest  which  did  not  before  exist  in  him 
independently  of  his  ownership  of  the  land,  it  is  a  reservation,  no 
matter  what  language  is  used ;  but  if  it  be  the  plain  purpose  not  to 
create  such  a  new  right  or  interest  which  would  vest  in  grantor, 
but  to  recognize  and  withhold  from  the  grant  an  existing  right 
which  would  otherwise  pass  to  the  grantee,  an  exception  is  made 
whatever  language  is  used.  An  exception  is  always  some  part  of 
the  estate  not  granted  at  all,  a  reservation  is  always  of  something 
taken  back  out  of  that  which  is  granted,  no  matter  what  name  the 
parties  may  give  to  them.  Whenever  possible  then,  by  the  words 
of  the  grant,  which  must  be  taken  most  strongly  against  the  grantor, 
where  the  thing  treated  does  not  belong  to  some  one  other  than  the 
grantor,  or  is  not  held  by  the  grantor  independently  of  his  owner- 
ship of  the  premises  granted,  the  construction  should  be  that  the 
intent  to  reserve  the  right,  rather  than  to  except  the  land.  As  where 
the  exception  of  a  family  burial  ground  described  by  metes  and 
bounds,  or  of  "South  40  feet  to  be  used  as  a  right  of  way;"  or  of 
"South  12  feet  for  alley  way ;"  the  easement  only  was  reserved. 

We  come  now  to  consider  descriptions  made  by  the  draftsman. 
It  should  be  the  aim  of  the  draftsman  to  clear  away  all  uncertainties 
so  far  as  possible  and  furnish  his  client  an  accurate  professional 
description  for  future  use.  As  we  have  seen,  no  little  ingenuity  is 
necessary  in  reconciling  vague  and  uncertain  descriptions  in  instru- 
ments of  record,  and  here  I  repeat  that  the  draftsman  is  confined 
strictly  to  the  record.  Thus,  in  writing  a  description,  unless  there 
be  a  clear  exception  in  some  grant  in  the  chain  of  title,  that  portion 
in  a  public  way  should  not  be  excepted  from  the  description — the 
fee  title  should  pass  subject  to  the  easement.  Where  there  has  been 
a  grant  of  right  of  way,  as  to  a  railroad,  or  canal  company,  or  the 
like,  the  easement  should  be  shown  and  no  exception  made,  that 
the  grantee  in  the  deed  to  be  made  shall  have  the  reversion.  While 
the  draftsman  may  rely  upon  the  record  as  he  finds  it,  yet  he  should 
so  far  as  he  is  permitted,  frame  his  description  to  avoid  entangle- 
ments and  complication  in  actual  measurement  of  the  ground. 
This  is  necessary  by  reason  of  inaccurate  surveys  and  incomplete 
maps.  He  is  called  upon,  we  will  say,  to  divide  a  lot  into  several 
parcels.  The  beginning  point  for  each  successive  description  should 
be  the  closing  point  of  the  one  immediately  preceding  and  ties  made. 
There  should  not  be  one  description  running  from  the  East  and 
another  from  the  West  without  ties.  The  reason  for  this  is  obvious 
when   we   consider   that   there   may  be  an   excess  or  shortage   in 

66 


ground  measurement  over  or  under  the  record  distance.  Take  a 
case  where  A  is  the  owner  of  a  lot  100  feet  North  and  South  as 
shown  by  the  recorded  plat.  He  conveys  the  South  half.  By  the 
record  he  has  50  feet  remaining  in  him,  but  the  draftsman  should 
describe  it  as  the  North  half.  Should  a  conveyance  be  found  of 
the  South  50  feet,  then  the  draftsman  should  so  describe  it,  and  not 
as  the  South  half.  Called  upon  for  a  description  of  the  remainder 
he  should  describe  it  as  all  of  the  lot  except  the  South  50  feet. 
If  deeds  be  found  of  record  of  North  50  feet  and  South  50  feet,  the 
draftsman  should  follow  such  descriptions.  \\'hen  framing  a  descrip- 
tion of  certain  part  of  a  lot,  the  lines  of  which  are  not  with  the 
cardinal  points  of  the  compass  as  "Northerly  50  feet"  it  should  be 
qualified  by  apt  words  to  show  intent  to  convey  a  strip  of  uniform 
width  of  50  feet.  If  the  conveyance  is  of  say.  Northerly  50  acres, 
the  Southerly  line  should  be  a  line  parallel  with  the  Northerly  line 
of  the  lot.  Care  should  be  taken  in  writing  descriptions  by  metes 
and  bounds  where  the  courses  are  not  with  the  cardinal  points  to 
fix  accurately  the  courses  by  angles  or  by  tie  to  record  monuments. 
For  example,  where  the  Westerly  line  of  a  lot  is  not  at  right  angles 
with  the  Northerly  line  and  it  is  desired  to  begin  on  the  Westerly 
line  50  feet  from  the  Northerly  line,  the  call  should  be  "beginning 
at  a  point  in  the  Westerly  line  said  lot  distant  Southerly  50  feet 
measured  along  said  line  from  Northerly  line  of  said  lot,"  otherwise 
without  the  qualifying  words  "along  said  line"  the  construction 
must  be  that  the  beginning  point  is  50  feet  South  of  the  Northerly 
line  measured  at  right  angles  thereto.  Again  in  all  descriptions  of 
fractional  parts  of  lots  the  area  of  which  is  shown  by  recorded  map 
to  extend  to  street  centers,  it  must  be  borne  in  mind  that  the 
boundaries  of  the  lot  do  not  extend  to  street  centers,  and  if  it  is 
intended  to  make  center  lines  of  streets  the  boundaries,  apt  words 
to  that  effect  must  appear  in  the  deed  itself.  In  bounding  by 
streets  in  cases  where  grantor  owns  the  fee  in  the  street,  unless 
there  is  some  grant  in  the  chain  of  title  which  prevents,  reference  to 
certain  lines  of  the  street,  unless  it  be  the  center  line,  should  be 
avoided.  Any  call  to  the  street  will  be  sufficient  to  pass  title  to  the 
center  of  the  street,  if  the  actual  boundary  be  not  a  side  line  so 
described  in  terms.  The  same  rule  applies  to  water  boundaries, 
where  it  is  the  intent  to  make  the  thread  of  the  stream  or  the  body 
of  the  water  itself  a  boundary. 

Where  vacation  of  a  way  has  been  had,  or  accretion  to  a  fixed 
boundary  line  has  been  made,  the  land  formerly  in  the  way  or  the 
added  lands  should  be  separately  described  or  included  in  an  entire 
description  by  metes  and  bounds.  So  far  as  possible  only  those 
monuments  which  are  shown  of  record  should  be  mentioned  and 

67 


reference  be  made  to  official  maps  and  surveys  of  record.  The 
multiplying  of  words  and  the  writing  of  two  descriptions  should 
be  avoided  In  short,  and  as  a  final  word,  that  description  is  the 
best  which  is  in  simplest  terms,  accurately  furnishes  identification 
of  the  premises  in  question  and  describes  none  other. 


I 


I 


68 


V. 

Mortgages  and  Trust  Deeds 

There  are  important  distinctions  between  a  Mortgage  and  a 
Trust  Deed  given  to  secure  the  payment  of  money.  While  in  prac- 
tical effect  both  work  as  security,  there  are  certain  rights  and 
remedies  under  such  instruments  which  are  sharply  distinguished. 

A  Mortgage  under  the  laws  of  our  State  creates  but  a  lien. 
The  Mortgagee  takes  no  title,  no  matter  in  what  form  the  instru- 
ment is  made.  This  is  not  true  in  all  states.  In  many  jurisdic- 
tions a  Mortgage  conveys  a  defeasible  title  to  the  Mortgagee.  That 
is  to  say,  he  holds  the  legal  title  until  the  debt  is  paid.  This  gives 
him  many  higher  rights  than  are  conceded  by  the  laws  of  the  State 
of  California.  In  this  State  he  has  a  lien  only,  but  if  he  take  pos- 
session of  the  property  he  cannot  be  ejected  until  the  debt  be  paid. 

A  Mortgagee,  has  under  the  ordinary  form  of  Mortgage,  a 
right  of  entry  upon  the  premises  to  protect  his  security.  Usually 
the  covenants  of  the  mortgage  give  him  the  right  to  prevent  waste, 
to  irrigate  and  the  like  if  the  Mortgagor  neglects  or  refuses  to  do 
these  things.  He  has  not  the  right  of  entry  by  reason  of  any  title, 
but  only  by  reason  of  the  contract  between  him  and  the  Mort- 
gagor; hence  the  Mortgagee  cannot  maintain  or  defend  any  suits 
relating  to  the  title  of  the  property.  He  can  only  enforce  or  de- 
fend his  lien. 

To  acquire  title  to  the  property  he  must  proceed  to  foreclose 
the  equity  of  redemption  of  the  Mortgagor  by  an  action  in  the  Su- 
perior Court.  Then  is  set  in  motion  the  machinery  which  in  time 
will  transfer  the  title  from  the  Mortgagor  to  a  purchaser  at  the 

ni  MoRTG vGE— Assumption  ok  Debt  by  Graxtee— Creation  of 
PERkov^L  Li  bility-Manner  OF.-In  order  to  render  a  grantee  of 
Stia-ed  property  personally  liable  for  the  mortgage  debt  it  is 
not  essential  that  thi  assumption  of  the  debt  should  be  recited  in 
?he  deed  or  that  there  should  be  a  formal  promise  to  pay  on  the 
Dan  of  the  grantee,  since  the  obligation  may  be  made  oially  m 
rVeparate    instrument,    ».•    imnlied    from    th.    transacMf^n    of    tlje. 

-^Andrews  v.  Robertson,  55  Cal.  Dec.  303. 

r,i  td— Agreement  for  Exchange  of  Mortgaged  Properties— 
Constrvction-Fnyment^o^^^^  Debts    Not    Assumed.-A 

written 
erties  rec 

In/  a^fu^mption^ry 'eUher -party- oFany  mortgage  debt. 

'^)         111     Id— SUH.SEQUENT     PrOMI.SE— PROTECTION     AGAINST    MORTGAGE— 

Vp Jx.lvT  OP  Dfrt  XoT  AssiMED.— An  oral  statement  made  by  one 
/  Payment  OF  UEBi^oT  ASh  I.  i^r^u  ^^  thP  nereement.  and  at  the  time 

g  deeds, 

ortgage, 

as 


•  i        In— FORFCIOSUKE       OF        M0RT(,  AGE— DKFIflENC  Y        JlDGMFNT— 

I  o^Vp^u  -An  a'ppeal  lies  trorn^^e^^^^^JZ^'lt^Z''''  '°''^- 


Right  of 


GRANTEE'S  ASSUI^PTION  OF  MORTGAGE 

White  V.    Schader,  Gal. ,   6l    Gal. Dec.   559;     May  4,    1921. 

(syllabi:) 

il)   ittuR-TGAGE  -  ASSuiv.x-Tloi^   UF   ^AYi^^iJiI\ra?   BY  GRAHTEE   - 

irARujj  EViDEc^OE.  -     An  agreemen-t   "to  assame  and  pay  a 

mortgage   is  not  inoonsistent  v/ith  a  deed   reciting  that 

the  property  is  granted   sugjeot   to  a  mortgage.     Oonse- 

Qiiently  suoli  an  agree?Tient  .may  be    shoim  hy  parol  evidence • 

(2)  ID.-   ir'AYiVlENT   OP  mOROJGAGE   -   jeAET   OP   OOESIIERATIOM- 
DUTY  OF  GrRAM'EE.   -  Where   the  payment   of  a  mortgage   forms 
part   of  the  consideration  of  a  oonveyanoe   the   prantee   is 
bound  to  pay  the  -same,  and    the    rule   is  the   same,   although 
there  be  no  assumption  of  payment   of  the  indebtedness,    if 
the  purchase  be  made   expressly  subject  to  the   encumbrance, 
and   the  amount   of  the   indebtedness   thereby  secured   is  in- 
cluded in  and  forms  a  part   of  the  consideration  of  tbe 
conveyance. 

(3)  ID.    -ASSmiPTIUl?   OF  rAY.-iEm   OP  iviORTGAOE  -  REOOVERY 
OP   DSPlOiEIOY  -   ^DliViE   OP   AGGRUAL   OP   0AU3E  OP  ACTIOiJ.    - 

An  action  by  a  mortgagor  to  recover  the  amount   of  a  defic- 
iency judgment  against   one  who  had  assumed   the  payment   of 
the  mortgage   is  not   prematurely  brought,   where   at   the   tim.e 
of  the   commencement   of  the   action  the  mortgagor  had  not 
paid   the   deficiency/,    since   the   right  to   reimbursifflment 
accrued  after  application  of  the   proceeds  of  the   sale. 

^,GNFF-A   note   secured   by   mortgage   is   not   negotiab 
defenses   set    up    in    the    answer    to    an    action    for    foie 
avaUable    lga?nst    the    plaintiff    assignee,    as    fully   as 
have  been  against  the  original  payee. 

ni      APPF\L— JxTIXiMENT— FORECI.OSUHK    OF    MORTGAC.E— 1 

—    ''^    A^   nnnpnl  from  the  iudgment    n  an  action  for  1 

ntpnn(f  mortgage    the  evidence   showing  that    such   a 

decision   on   the   i^erits 

Foster  v.  Branen,  55  Cal.  Dec.  641. 

rn     MoRTc  \(iF— Form    of    Deep— Intention    of    Pari 

="^"Mni'.t  -oTtr^-frU'  .^.-.t'srse  sfs 

flte"?onWyance_w_as  giveii  as  security  for  the  debt. 


r^  ^  t 


V. 


Mortgages  and  Trust  Deeds 

There  are  important  distinctions  between  a  Mortgage  and  a 
Trust  Deed  given  to  secure  the  payment  of  money.  While  in  prac- 
tical effect  both  work  as  security,  there  are  certain  rights  and 
remedies  under  such  instruments  which  are  sharply  distinguished. 

A  Mortgage  under  the  laws  of  our  State  creates  but  a  lien. 
The  Mortgagee  takes  no  title,  no  matter  in  what  form  the  instru- 
ment is  made.  This  is  not  true  in  all  states.  In  many  jurisdic- 
tions a  Mortgage  conveys  a  defeasible  title  to  the  Mortgagee.  That 
is  to  say,  he  holds  the  legal  title  until  the  debt  is  paid.  This  gives 
him  many  higher  rights  than  are  conceded  by  the  laws  of  the  State 
of  California.  In  this  State  he  has  a  lien  only,  but  if  he  take  pos- 
session of  the  property  he  cannot  be  ejected  until  the  debt  be  paid. 

A  Mortgagee,  has  under  the  ordinary  form  of  Mortgage,  a 
right  of  entry  upon  the  premises  to  protect  his  security.  Usually 
the  covenants  of  the  mortgage  give  him  the  right  to  prevent  waste, 
to  irrigate  and  the  like  if  the  Mortgagor  neglects  or  refuses  to  do 
these  things.  He  has  not  the  right  of  entry  by  reason  of  any  title, 
but  only  by  reason  of  the  contract  between  him  and  the  Mort- 
gagor; hence  the  Mortgagee  cannot  maintain  or  defend  any  suits 
relating  to  the  title  of  the  property.  He  can  only  enforce  or  de- 
fend his  lien. 

To  acquire  title  to  the  property  he  must  proceed  to  foreclose 
the  equity  of  redemption  of  the  Mortgagor  by  an  action  in  the  Su- 
perior Court.  Then  is  set  in  motion  the  machinery  which  in  time 
will  transfer  the  title  from  the  Mortgagor  to  a  purchaser  at  the 
sale  made  by  the  Sheriff  or  a  Commissioner  appointed  by  the  Court 
for  the  purpose  of  making  sale  when  a  Decree  of  Foreclosure 
has  been  entered.  The  law  provides  when  such  a  suit  is  begun  a 
lis  pendens  may  be  filed  in  the  office  of  the  County  Recorder,  giv- 
ing notice  of  the  action  and  description  of  the  property  and  the 
names  of  the  parties  to  the  action,  and  from  and  after  the  date  of 
the  filing  of  such  notice  all  persons  dealing  with  the  property  are 
deemed  to  have  notice  of  the  action  and  they  deal  with  it  subject 
to  the  right  of  the  plaintiff  in  the  action.  A  plaintiff  is  not  re- 
quired to  give  heed  to  the  claims  of  any  person  dealing  with  the 

69 


property  after  his  notice  has  been  filed,  either  purchasers,  judg- 
ment creditors  or  other  lien  holders.  His  deed  made  to  him,  or 
to  any  purchaser,  cuts  off  the  rights  of  any  parties  dealing  with 
the  land  subsequent  to  such  public  notice.  However,  the  Mort- 
gagee in  bringing  his  action,  if  he  desires  to  cut  off  all  rights  ac- 
cruing subsequent  to  the  date  of  his  Mortgage  must  make  care- 
ful inspection  of  the  premises  for  notice  of  rights  given  by  pos- 
session and  make  all  persons  claiming  any  right  or  title  thereto 
parties  defendant ;  otherwise  they  are  not  bound  by  the  Decree  of 
Foreclosure. 

Under  our  law^s  strict  foreclosures  are  permitted.  That  is  to 
say,  a  Mortgage  may  contain  a  power  of  sale  given  to  the  Mortgagee 
under  the  terms  of  which  he  can,  upon  default  in  payment,  proceed 
to  advertise  and  sell  the  property,  and  this  in  lieu  of  a  foreclosure 
by  judicial  process.  This  form  of  Mortgage  is  rarely  used,  and  is 
practically  obsolete.  The  power  of  sale  in  such  a  Mortgage  given 
_dies  when  action  on  the  note  secured  by  the  Mortgage  is  barred  by 
the  Statute  of  Limitations.  This  is  also  true  in  the  case  of  any 
pledge  of  property  with  a  power  of  sale  given.  It  is  a  common 
practice  in  the  pledge  of  personal  property  to  execute  and  deliver 
with  the  note  a  collateral  agreement,  pledging  the  personal  property 
for  the  payment  of  the  debt,  and  giving  to  the  pledgeholder  a  power 
of  sale  in  the  event  of  nonpayment.  This  power  of  sale  dies,  as  I 
have  stated,  when  the  statute  has  run  against  the  principal  obliga- 
tion. This  is  for  the  reason  that  no  actual  title  is  transferred,  but 
merely  a  lien  given  as  security.  This  is  not  true,  however,  where 
the  title  is  conveyed  in  trust  under  a  Trust  Deed  made  to  a  Trustee 
as  security,  for  in  such  a  case  a  title  passes.  There  is  no  lien, 
strictly  speaking,  although  it  has  the  practical  effect  of  a  lien 
ranking  in  every  respect  with  the  lien  created  by  a  Mortgage  or 
other  contract,  but  in  law  it  is  of  a  higher  character  than  a  lien. 
The  powers  and  authorities  delegated  by  the  Trust  Deed  do  not 
expire  until  the  object  of  the  trust  be  accomplished.  In  other  words, 
a  debt  is  never  barred  by  the  Statute  of  Limitations,  and  the  rights 
and  remedies  and  powers  given  to  the  Trustee  do  not  die  until  the 
debt  be  paid.  It  is  true  that  the  note  secured  by  the  Trust  Deed 
cannot  be  sued  upon  when  the  time  has  run  within  which  suit  could 
■be  maintained  upon  the  note,  if  it  were  not  secured.  In  short,  the 
Statute  of  Limitations  may  have  run  against  any  action  on  the  note, 
yet  the  payment  can  be  enforced  by  a  sale  under  the  terms  of  the 
Trust  Deed,  and  if  the  property  fails  to  bring  an  amount  sufficient 
to  pay  the  debt  at  the  sale,  suit  can  not  be  maintained  on  the  note 
for  any  deficiency,  if  any,  after  the  statute  has  run. 

The  Statute  of  Limitations  is  four  years  from  and  after  the 

70 


date  of  the  maturity  of  a  promissory  note,  if  it  be  executed  within 
this  State,  and  two  years  if  it  be  executed  outside  the  State.  It 
must  be  borne  in  mind  that  the  Statute  of  Limitations  does  not 
affect  the  debt.  It  merely  is  a  bar  to  any  suit  at  law  upon  the  note 
itself  after  the  expiration  of  the  time  limited  by  statute.  It  is  very 
important  to  bear  in  mind  that  a  note  executed  outside  the  State  is 
barred  two  years  after  its  maturity,  and  not  in  four  years  as  in  the 
case  of  one  executed  in  the  State.  I  can  give  no  logical  reason  for 
this  distinction,  yet  it  is  a  statutory  provision  of  this  State,  and  has 
been  upheld.  We  will  take  a  very  common  case  for  illustration. 
You  have  a  client,  a  resident  of  California,  owning  property  in 
California,  who  applies  to  you  for  a  loan.  Pending  the  negotiations 
he  is  called  to  Chicago  on  business.  To  facilitate  his  business  here 
you  send  to  him  the  note  and  Mortgage  which  he  executes  in 
Chicago,  and  returns  to  you.  Your  right  of  action  on  that  note  is 
barred  two  years  after  its  maturity. 

As  I  have  emphasized  before,  no  debt  is  ever  barred  in  law. 
It  follows  that  even  after  the  Statute  of  Limitations  has  run  and  the 
right  of  action  in  the  Mortgagee  is  forever  gone,  the  Mortgagor, 
or  any  one  claiming  under  him,  cannot  quiet  his  title  against  the 
Mortgagee,  his  heirs  or  assigns,  without  paying  the  debt.  This 
applies  in  cases  where  those  deriving  title  from  the  Mortgagor  have 
assumed  the  payment  of  the  debt  or  in  dealing  with  their  immediate 
grantor  have  taken  into  consideration  the  debt  in  paying  for  the 
land  and  in  proportionately  reducing  the  purchase  price. 

It  has  been  held,  and  very  justly,  that  one  dealing  with  land  I 
is  entitled  to  rely  upon  the  record  as  he  finds  it.  That  vyhere  he 
inspects  the  record  and  finds  a  Mortgage  on  the  premises  shown 
by  its  terms  to  be  barred  by  the  Statute  of  Limitations,  and  the 
Mortgagor  has  conveyed  the  title,  and  there  is  nothing  in  the  chain 
of  title~tD~Show  that  the  subsequent  grantees  assumed  the  payment 
of  the  debt,  he  can  ignore  the  Mortgage,  and  in  my  opinion,  could 
maintain  an  action  to  quiet  title  against  the  Mortgagee  to  clear  his 
record.  He  is  permitted  by  law  to  assume  that  the  debt  has  been 
paid.  He  cannot  rely  upon  this  assumption,  however,  if  the  title 
still  remains  in  the  Mortgagor  or  his  heirs. 

Trust  Deeds  to  secure  the  payment  of  money  are  something  of 
an  anomaly  in  California.  The  Courts  have  repeatedly  held  that 
no  specific  trust  in  regard  to  real  estate  is  valid  in  California  unless 
it  falls  under  some  one  of  the  classifications  of  the  statute.  These 
classifications  will  be  discussed  in  the  paper  on  trusts.  Suffice  it  to 
say  at  this  point  that  the  statute  does  not  define  or  permit  in  express 
terms  or  by  implication  such  a  form  of  security,  but  the  Supreme 
Court  has  held  that  by  reason  of  the  long  continued  use  of  such 

71 


security  affecting  at  this  time  untold  millions  in  value,  that  they 
will  be  upheld  and  permitted  as  a  rule  of  property  despite  the 
statutes  and  the  oft  repeated  declaration  that  no  specific  trust  in 
real  estate  is  valid  unless  it  fall  under  the  statutory  classification. 
All  this  upon  the  consideration  that  such  a  great  amount  of  prop- 
erty would  be  affected  by  a  contrary  decision  and  so  much  loss 
incurred  by  people  who  have  dealt  in  good  faith,  that  the  Courts 
will  not  at  this  time  hold  them  invalid.  The  Court  has  said  in  so 
many  words  that  were  the  question  before  them  in  the  first  instance 
where  such  deeds  had  been  used  it  would  pronounce  them  void. 
It  may  be  taken  therefore  as  well  established  law  in  this  State  that 
such  conveyances  will  be  upheld,  but  this  attitude  of  the  Court  is 
very  distinct  notice  to  all  that  the  powers  given  to  a  Trustee  m  such 
a  deed  must  be  strictly  followed,  and  that  the  Trustee  and  the 
beneficiary  under  the  trust  will  be  held  to  the  strictest  account  and 
in  all  respects  held  to  the  highest  good  faith,  that  the  debtor  may 
not  suffer  any  undue  imposition  or  deprivation. 

I  emphasize  then  this  rule,  that  in  foreclosure  under  such 
instruments,  every  possible  notice  and  -indulgence  should  be  given 
to  the  debtor  before  sale  is  made,  for  when  the  hammer  falls  he  is 
absolutely  without  right  of  redemption  unless  he  can  go  into  Court 
in  an  equitable  action  and  show  that  the  sale  was  fraudulent. 
He  cannot  in  such  an  action  question  the  right  of  the  beneficiary 
to  order  a  sale  or  the  right  of  the  Trustee  to  sell,  or  the  price 
obtained  at  the  sale,  if,  as  a  matter  of  fact,  the  proceedings  have 
been  fairly  and  honestly  conducted.  It  is  not  incumbent  upon  the 
beneficiary  or  the  Trustee  to  indulge  his  debtor  after  he  is  in 
default,  but  a  Court  of  Equity  will  inquire  carefully  into  all  the 
steps,  and  if  it  find  that  the  debtor  has  been  oppressed  they  will 
lean  toward  him.  The  Courts  will  not  enlarge  any  of  the  language 
or  terms  of  such  an  instrument,  and  the  powers  and  authority  of 
the  Trustee  will  be  measured  strictly  by  the  terms  of  the  Trust 
Deed.  The  recitals  in  the  deed  of  all  the  preliminary  steps  leading 
up  to  the  sale  such  as  demands  upon  the  debtor,  the  exercise  of  the 
option  to  declare  the  debt  due,  the  notice,  the  manner  and  time  and 
place  of  sale,  and  as  to  sale  and  the  amount  of  bids  received,  are 
conclusive  against  the  debtor,  and  those  claiming  under  him  if  it 
.be  agreed  in  the  instrument  that  they  shall  so  be,  but  these  recitals 
lean  be  overcome  if  the  debtor  can  show  fraud  or  collusion,  causing 
detriment  to  him. 

As  I  have  stated  before,  a  Trustee  under  such  an  instrument 
takes  a  full  title  to  the  land,  legal  and  equitable,  but  only  for  the 
purposes  of  the  trust.  Here  we  have  another  fiction  of  the  law  and 
an  anomaly,  for  while  it  is  true  that  the  Trustee  takes  the  full  title, 

72 


yet  a  title  is  left  in  the  grantor  which  is  as  of  high  order  as  that  he 
had  before  he  executed  the  deed,  subject  only  to  the  right  which  he 
has  conveyed  to  the  Trustee,  which  right  in  its  nature  is  analogous 
to  a  lien.  Thus,  after  he  has  executed  a  Trust  Deed,  the  property 
is  subject  to  Homestead  Declaration.  He  can  convey  it.  It 
descends  to  his  heirs ;  he  can  make  mortgages  or  execute  another 
Trust  Deed  to  secure  another  debt,  yet  there  is  always  in  the 
Trustee  such  an  interest  as  I  may  denominate  a  dormant  title, 
which  may  at  any  instant  of  time  be  brought  into  full  life  if  it  be 
necessary  for  the  Trustee  to  take  any  action  to  protect  his  estate. 
I  think,  therefore,  that  I  am  justified  in  saying,  while  it  has  not  to 
my  knowledge  been  so  held  by  the  Courts,  that  this  dormant,  legal 
and  equitable  title  which  rests  in  the  Trustee  comes  into  full  vigor 
and  life  at  the  very  instant  the  hammer  falls  at  the  Trustee's  sale 
and  passes  from  him  at  the  same  instant  of  time,  for  at  that  very 
moment  it  is  necessary  that  the  Trustee  have  the  full  legal  and 
equitable  title  to  the  exclusion  of  his  grantor  for  the  purpose  of 
passing  such  title  to  a  purchaser  at  the  sale. 

That  this  would  seem  to  be  the  true  rule  is  borne  out  by  the 
facts  that  a  Trustee  under  such  a  Deed  of  Trust  cannot  maintain 
suit  in  ejectment  against  a  trespasser  upon  the  land.  It  could  not 
sue  to  collect  rents  payable  to  its  grantor,  it  could  exercise  no  act 
of  dominion  over  the  property  so  long  as  the  debtor  be  not  in 
default.  To  say  that  one  has  a  full  title  to  property  and  yet  cannot 
exercise  these  acts  of  dominion  is  to  state  an  absurdity,  so  in  my 
opinion  it  must  be  deemed  that  the  Trustee's  title  only  comes  into 
full  vigor  and  life  when  the  necessity  for  the  protection  of  the  trust 
arises,  and  he  is  in  no  wise  concerned  with  any  other  feature  of  the 
title. 

It  is  better  business  policy  to  name  as  a  Trustee  a  corporation 
authorized  by  law  to  act  as  Trustee.  This  for  the  reason  that  such 
companies  continue  in  business  and  the  creditor  is  relieved  from 
any  possibility  of  annoyance,  trouble  or  expense  in  the  case  of  a 
death  or  disability  of  an  individual  Trustee.  Under  the  laws  of 
this  State  no  trust  is  allowed  to  fail  for  the  want  of  a  Trustee,  and 
upon  the  death  or  removal  or  resignation  of  a  Trustee  of  any  specific 
trust,  the  trust  falls  into  the  Superior  Court  of  the  County  and  the 
judges  thereof  can  upon  proper  petition  name  a  successor  in  trust. 
This  often  causes  expense  and  annoyance,  and  can  be  avoided  by 
the  employment  of  corporation  Trustees.  If  it  is  desired,  a  succes- 
sor or  successors  in  trust  can  be  provided  for  in  such  instruments 
by  the  simple  agreement  to  the  effect  that  upon  the  death,  removal, 
refusal  or  inability  to  act  of  the  Trustee  named,  that  another  Trustee 
may  be  selected  by  the  parties,  or  by  the  holder  of  the  note,  and  that 

73 


upon  such  appointment  being  certified,  signed  and  acknowledged 
by  the  parties  authorized  to  name  the  Trustee,  and  recorded  in  the 
Recorder's  office,  the  title  vested  in  the  original  Trustee  will  then 
vest  in  the  successor  named,  but  no  method  of  the  appointment  of 
a  Trustee,  unless  it  be  otherwise  contracted  in  the  Trust  Deed,  can 
be  employed  other  than  by  petition  to  the  Superior  Court. 

It  is  not  necessary  that  the  Trust  Deed  be  formally  accepted 
by  the  Trustee  unless  it  is  so  formally  contracted  in  the  instrument. 
A  performance  of  any  of  the  duties  imposed  upon  the  Trustee,  such 
as  a  sale  of  the  property  by  the  Trustee,  implies  his  acceptance. 
Under  the  forms  in  common  use  in  this  community,  however,  it  is 
provided  that  the  trust  shall  not  be  operative  until  accepted  by  the 
Trustee  on  the  face  of  the  instrument.  Where  this  is  found,  it  is 
essential  that  the  Trustee  make  formal  acceptance,  although  I  am 
inclined  to  believe  that  if  the  Trustee  did  in  fact  proceed  and  thus 
signify  his  acceptance,  that  the  debtor  would  be  bound  if  all  the 
other  proceedings  were  regular. 

It  is  also  a  practice  in  this  community  to  have  the  note  certified 
by  the  Trustee  as  being  the  identical  note  secured  by  the  Trust 
Deed.  This  is  not  a  legal  requirement,  but  it  is  certainly  a  safe  and 
conservative  business  practice  and  one  to  be  commended. 

It  is  also  the  practice  of  Trust  Companies  to  retain  in  their 
possession  the  Trust  Deeds.  This  is  a  safe  and  commendable 
practice  as  they  are  thus  less  liable  to  loss  or  destruction,  and  are 
available  when  the  Trustee  comes  to  reconvey  or  to  a  foreclosure. 
The  Trustee  is  entitled  to  the  possession  of  the  instrument,  as  he  is 
the  grantee.  The  matter  of  certification  of  the  notes  by  the  Trustee 
is  of  high  importance,  as  will  readily  be  suggested  to  your  minds. 
It  prevents  an  over  issue  of  the  notes  where  there  are  a  number  of 
them.  One  dealing  with  such  notes  is  put  upon  notice  of  the  terms 
of  the  Trust  Deed,  and  he  must  in  protection  to  himself  read  the 
instrument,  and  if  he  finds  the  statement  therein  that  no  note  is 
deemed  to  be  secured  thereby  which  is  not  certified  by  the  Trustee, 
and  he  is  offered  a  note  which  is  not  so  certified,  he  deals  with  it  at 
his  own  peril. 

It  is  often  alleged  that  these  Trust  Deeds  by  reason  of  their 
provisions  for  strict  foreclosure,  whereby  the  equity  of  redemption 
is  cut  off,  are  oppressive  and  drastic.  The  answer  to  this  is  that  in 
live  communities,  such  as  California,  they  operate  not  as  instruments 
of  oppression  in  the  hands  of  grasping  creditors,  but  as  a  distinct 
aid  and  benefit  to  the  borrowing  public.  True,  there  may  be  isolated 
instances  where  men  have  suffered  oppression  and  wrong  at  the 
hands  of  an  usurous  and  grasping  creditor,  but  I  believe  that  it  is 
your  observance,  as  it  has  been  mine,  that  in  practically  all  cases 

74 


such  securities  have  operated  to  the  benefit  of  the  borrower.  When 
the  creditor  has  a  speedy  remedy  for  the  recovery  of  his  money  and 
the  possession  of  the  property,  naturally  he  will  loan  larger  sums 
upon  the  security.  It  is  a  well  known  fact  that  the  Courts  of  our 
State  are  crowded  and  that  one  seeking  to  foreclose  a  Mortgage  in 
many  instances  is  required  to  wait  from  one  to  two  years,  in  some 
cases  three  years,  to  recover  the  property.  If  this  were  the  only 
means  of  recovery  given  the  creditor,  men  would  hesitate  to  loan 
their  money.  As  it  stands  now,  the  lender  is  safe  in  taking  junior 
liens,  for  he  knows  that  he  can  recover  by  a  speedy  method  of 
foreclosure.  It  is  not  too  strong  a  statement  to  say  that  one  of  the 
greatest  factors  in  the  upbuilding  and  development  of  Southern 
California  as  a  home  district  is  directly  traceable  and  due  to  the 
practice  of  employing  Trust  Deeds  as  security.  Many,  many  thou- 
sands of  instances  can  be  pointed  to  in  the  City  of  Los  Angeles 
alone  where  people  have  been  enabled  to  secure  homes  under  such 
a  plan  as  this :  A  building  company  will  place  upon  the  property  a 
first  mortgage  loan,  sell  the  property  subject  to  this  lien  and  take 
back  a  Trust  Deed  for  a  part  at  least  of  the  purchase  price,  giving 
the  buyer  an  opportunity  to  pay  for  his  home  in  installments. 
We  have  but  to  look  about  us  in  this  city,  with  its  miles  upon  miles 
of  beautiful  and  comfortable  homes,  to  see  the  wisdom  of  such  a 
practice.  Constantly  attempts  are  made  to  prevail  upon  the  Legis- 
lature to  enact  laws  permitting  a  redempion  from  such  sales.  In  my 
opinion,  such  legislation  would  be  unwise  and  even  foolish. 

The  power  of  sale  given  in  a  Trust  Deed  is  the  only  remedy 
where  the  trust  has  not  failed  or  the  security  become  worthless. 
Such  an  instrument  cannot  be  foreclosed  as  a  Mortgage.  However, 
there  are  certain  forms  of  Trust  Deeds  usually  used  in  the  case  of 
bond  issues,  giving  alternative  remedies,  that  is  to  say,  power  is 
given  the  Trustee  to  sell  at  public  auction,  thus  effecting  a  strict 
foreclosure  without  right  of  redemption,  or  to  proceed  in  a  Court  of 
Equity  to  foreclose  by  judicial  process. 

The  notes  secured  by  either  a  Trust  Deed  or  Mortgage  cannot 
be  sued  upon  separately  and  apart  from  the  Mortgage  or  Trust 
Deed  so  long  as  the  security  remains.  However,  if  the  title  should 
fail,  and  the  Mortgage  or  Trust  Deed  from  any  cause  become 
valueless,  then  suit  may  be  maintained  upon  the  note,  but  where 
such  is  not  the  case,  but  one  action  can  be  maintained,  and  that  is 
for  foreclosure.  In  judicial  foreclosures  in  case  the  property  does 
not  bring  sufficient  at  the  sale  to  pay  the  debt,  a  deficiency  judg- 
ment may  be  entered  without  further  suit  against  those  defendants 
who  are  found  personally  liable  for  the  debt.  Where  the  property 
does  not  bring  enough  at  a  Trustee's  sale  to  pay  the  debt,  action 

75 


may  then  be  maintained  upon  the  note  to  recover  the  balance, 
provided  the  Statute  of  Limitations  has  not  run. 

Now  as  to  the  parties  to  such  instruments.  Broadly  speaking, 
any  person  capable  of  contracting  can  make  or  receive  a  Mortgage. 
The  same  rules  apply  here  to  Mortgages  as  apply  to  grantors  in 
deeds ;  thus  one  under  legal  disability  such  as  minority,  or  one  who 
is  incompetent  is  incapable  of  contracting.  Corporations  are  per- 
mitted to  make  Mortgages  as  freely  as  individuals.  It  is  true  thar 
the  statute  prohibits  a  corporation  from  creating  debts  beyond  its 
authorized  capital  stock,  but  this  statutory  prohibition  does  not 
make  void  Mortgages  made  in  violation  of  it.  The  directors  of  a 
corporation  are  personally  liable  for  debts  created  by  them  in  excess 
of  authorized  capital  stock,  but  where  a  corporation  has  received 
the  proceeds  of  its  notes,  bonds  or  mortgages,  it  cannot  plead  that 
its  act  in  creating  the  debt  were  not  permitted  by  law.  All  Mort- 
gages by  a  corporation  must  be  made  through  its  Board  of  Directors 
acting  as  such,  and  proper  authority  must  be  given  by  the  Board  of 
Directors  to  the  officers  executing  the  Mortgage.  Yet,  if  these  for- 
malities be  not  observed,  and  the  notes  and  Mortgage  are  executed 
in  the  corporate  name  and  in  otherwise  proper  form,  and  the  corpor- 
ation receives  the  proceeds,  it  is  bound.  It  must  be  remembered 
in  taking  notes  of  a  corporation,  or  even  in  extending  credit  to  a 
corporation,  that  the  stockholders  are  relieved  from  all  personal  lia- 
bility at  the  end  of  three  years  from  and  after  the  date  the  debt  is 
incurred. 

Corporations,  other  than  business  corporations  having  a  capital 
stock,  can  mortgage  their  property  only  upon  authority  given  by 
the  Superior  Court.  Certain  statutory  provisions  are  required. 
Public  utility  coporations  such  as  water  companies,  street  car 
companies  and  railroad  companies  are  not  permitted  to  mortgage 
certain  of  their  properties  except  by  authority  of  the  Railroad 
Commission.  Certain  formalities  are  to  be  observed  and  certain 
proceedings  had  leading  up  to  this  permission.  All  corporations 
issuing  bonds  or  other  evidences  of  indebtedness,  other  than  notes 
not  to  be  offered  to  the  public,  must  secure  permission  of  the  Cor- 
poration Commissioner  under  the  terms  of  what  is  known  as  the 
Blue  Sky  Law.  The  rules  applicable  to  such  terms  can  be  secured 
from  the  office  of  the  Railroad  Commission  or  the  Corporation 
Commissioner,  and  will  not  be  touched  upon  here,  as  there  are 
constant  changes  made  in  such  requirements,  and  it  would  serve  no 
good  end  to  discuss  them  here. 

Guardians,  administrators  and  executors  can  only  mortgage  the 
property  of  the  estate  by  authority  of  the  Probate  Court,  and  such 
Mortgages  must  contain  a  recital  of  the  authority  so  given.    There 

76 


is  no  personal  liability  of  the  maker  and  no  deficiency  can  be  had 
against  the  property  of  the  estate.  Mortgages  made  upon  the 
interest  of  minors  must  be  made  upon  their  separate  interests,  that 
is  to  say,  each  minor  must  be  given  the  right  to  redeem  his  particular 
property  or  interest  therein  upon  his  payment  of  his  proportionate 
amount  of  the  debt.  An  administrator  or  executor  or  guardian 
cannot  deal  with  the  property  of  the  estate  for  his  own  benefit. 
It  is  therefore  incumbent  upon  one  dealing  with  him  to  pay  him  the 
proceeds  in  his  representative  capacity,  and  not  in  his  individual 
capacity. 

A  Mortgage  made  to  joint  payees,  that  is  to  say,  where  the 
Mortgage  runs  to  John  Smith  and  Mary  Smith,  may  be  satisfied  by 
payment  to  either,  and  a  release  by  either  is  good.  This  is  also  true 
in  cases  where  it  is  expressly  stated  that  they  hold  as  joint  tenants. 
A  Mortgage  should  not  be  made  to  John  Smith  or  Mary  Smith,  for 
the  question  then  arises  as  to  who  furnished  the  funds,  and  to 
whom  was  the  Mortgage  delivered.  Many  times  parties  are  put  to 
much  trouble  and  expense  and  annoyance  to  ascertain  these  facts, 
and  it  is  a  cardinal  business  rule  that  Alortgages  should  not  so  run. 
Mortgages  made  to  Trustees  should  be  made  in  their  representative 
capacity,  and  recitals  made  of  such  capacity. 

Any  interest  in  property  may  be  mortgaged  or  conveyed  in 
trust.  The  same  rules  apply  here  as  apply  to  deeds.  A  mere 
possibility  of  interest  cannot  be  mortgaged.  A  Mortgage  is  valid 
which  purports  to  cover  property  thereafter  acquired.  The  rule  as 
to  delivery  does  not  apply  here,  it  being  expressly  contracted  that 
such  property  shall  come  under  the  lien  of  the  Mortgage  when 
acquired. 

Courts  of  Equity  have  held  that  such  contracts  are  valid. 
They  are  especially  applicable  to  the  property  of  public  service 
corporations.  A  deed  purporting  to  convey  after  acquired  property 
is  void  for  want  of  delivery,  but  this  rule  is  relaxed  as  regards 
Mortgages. 

Any  instrument,  other  than  a  conveyance  in  trust,  is  to  be 
deemed  a  Mortgage  if  it  is  given  to  secure  the  payment  of  a  debt. 
A  deed  given  to  secure  a  debt  is  a  Mortgage,  and  here  I  desire  to 
point  out  the  illegality  of  a  transaction  such  as  this :  One  borrows 
money  from  another,  giving  to  his  creditor  a  deed  of  his  property 
or  depositing  a  deed  to  his  creditor  with  a  third  party,  with  the 
understanding  that  if  the  debt  is  not  paid  when  due,  that  the  deed 
is  to  be  delivered  and  the  creditor  deemed  the  owner  of  the  property. 
Such  a  transaction  is  wholly  void  as  a  conveyance  of  the  title. 
The  debtor  is  not  permitted  by  the  laws  of  this  State  to  waive  his 
right  of  redemption  by  the  instrument  creating  the  debt.    If  he  does 

77 


waive  his  right  of  redemption,  it  must  be  in  a  separate  and  later 
transaction.  The  law  does  not  permit  forfeiture  of  title  upon  non- 
payment of  debt  without  legal  process,  foreclosing  the  debtor's 
equity  of  redemption.  The  deed  is  a  Mortgage  and  must  be  fore- 
closed if  the  debtor  seeks  to  secure  the  title.  The  Mortgagor  him- 
self cannot  demand  a  foreclosure,  but  he  has  a  right  to  maintain  an 
equitable  action  for  redemption,  and  if  he  redeems  the  Mortgage  is 
no  longer  effective. 

It  is  a  common  practice  to  avoid  foreclosure  for  the  Mortgagor 
and  Mortgagee  to  agree  that  the  Mortgagor  will  convey  the  property 
to  the  Mortgagee  and  take  back  from  him  an  agreement  to  purchase 
within  a  stated  time  for  the  amount  of  debt  and  accrued  interest. 
This  is  but  another  form  of  security,  and  does  not  accomplish  the 
end  intended,  for  the  Mortgagee  now  holds  a  deed  which  he  must 
foreclose  instead  of  a  Mortgage,  and  the  debtor  is  yet  entitled  to 
his  year  of  redemption.  The  Mortgagee  has  a  poorer  form  of 
'security  than  he  had  before,  for  he  cannot  in  an  action  to  foreclose 
recover  attorney's  fees.  It  is  perfectly  lawful  for  the  parties  to 
agree  that  the  debtor  will  surrender  his  property  in  full  payment 
of  the  debt,  and  the  transaction  must  be  bona  fide  and  beyond  ques- 
tion, and  in  full  settlement  of  the  debt.  The  deed  should  so  express 
the  intention.  When  the  parties  have  once  settled  and  the  debt  is 
extinguished,  they  can  then  deal  as  can  any  other  individuals.  When 
a  deed  is  taken  in  satisfaction  of  the  debt,  the  Mortgage  should  be 
released  of  record  as  the  law  does  not  presume  it  was  the  intent  tjo 
merge  the  two  interests.    The  intent  to  merge  must  appear. 

The  Mortgagee,  his  successors,  personal  representatives  or 
assigns,  can  make  satisfaction  of  the  Mortgage  as  can  any  one  of 
joint  Mortgagees,  but  where  the  Mortgage  runs  to  individuals 
severally  and  not  jointly,  the  satisfaction  must  be  made  by  all  those 
as  where  the  Mortgage  is  to  John  Smith  and  Mary  Smith,  one  half 
each,  both  must  join.  An  administrator,  guardian,  or  executor 
cannot  satisfy  a  Mortgage  given  by  himself  without  permission  of 
Court. 

It  is  not  necessary  to  set  out  in  a  Mortgage  a  copy  of  the 
notes,  although  it  is  good  practice  so  to  do.  It  is  sufficient  if  it 
appear  from  the  face  of  the  instrument  what  the  debt  secured  may 
be.  A  note  may  be  dated  before  or  after  the  date  of  the  Mortgage 
and  it  is  lawful  to  so  draw  the  Mortgage  to  secure  notes  to  be 
executed  thereafter. 

The  note  and  Mortgage  are  read  as  one  instrument.  The  note 
may  pass  without  endorsement,  but  by  assignment,  and  the  assign- 
ment of  the  note  carries  all  Mortgage  security  with  it.  One  dealing 
with  a  note  secured  by  a  Mortgage  is  bound  by  every  recital  in  the 

78 


Mortgage.  A  Mortage  note  or  Trust  Deed  note  is  not  negotiable. 
It  is  assignable  and  transferable,  but  does  not  fall  under  the  protec- 
tion of  the  law  merchant.  The  law  merchant  applies  only  to  nego- 
tiable paper,  and  a  negotiable  instrument  is  one  certain  in  its  terms, 
payable  at  a  certain  date  in  money,  without  any  qualifications. 
Such  an  instrument  in  the  hands  of  a  purchaser  in  the  ordinary 
course  of  business,  in  good  faith  and  for  value,  before  maturity  and 
before  notice  of  any  infirmity,  is  clear  of  any  equities  existing 
between  the  maker  and  the  payee.  This  is  not  true,  however,  with 
notes  secured  by  Mortgage  or  a  Trust  Deed.  Any  one  dealing 
with  such  a  note  at  any  time,  must  make  inquiry  to  discover  if 
there  are  any  equities  existing,  such  as  a  failure  of  the  consideration, 
or  as  to  any  payments  which  may  have  been  made  and  which  do  not 
appear  upon  the  note.  Thus,  it  is  incumbent  upon  one  purchasing 
a  note  to  make  inquiry  of  the  maker  if  he  has  received  the  full 
consideration,  if  he  has  any  defenses  to  an  action  on  the  note,  or  if 
he  has  made  any  payments  on  the  debt  which  do  not  appear 
endorsed  upon  the  note.  If  he  stand  mute  and  refuse  to  give  the 
information,  he  is  then  barred  from  asserting  any  such  equity  or 
claims,  for  he  has  been  given  his  opportunity  to  be  heard  and  failed 
to  disclose  his  rights.  Where  an  assignment  of  note  and  Mortgage 
is  taken  the  assignment  should  be  recorded  and  the  maker  notified 
for  in  absence  of  notice  he  may  make  payments  to  the  original 
holder. 

Where  a  Mortgage  is  given  for  a  certain  sum,  say  for  $1500.00, 
and  but  $1000.00  is  advanced  to  the  Mortgagor,  and  the  Mortgagee 
subsequently  sells  the  note,  his  assignee  can  collect  only  what  has 
been  advanced  to  the  Mortgagor.  He  is  not  entitled  to  rely  solely 
upon  the  statement  of  his  assignor.  Many  cases  of  this  class  have 
arisen  in  this  jurisdiction,  mostly  arising  out  of  transactions  where 
building  loans  are  made,  where  assignees  have  suffered  loss. 

Too  much  stress  cannot  be  laid  upon  the  statement  that  one 
loaning  money  upon  real  property  must  look  to  the  possession,  and 
if  any  person  is  found  in  possession,  must  ascertain  what  rights  he 
claims.  It  is  not  uncommon  in  this  community  at  least,  where  a 
great  deal  of  property  is  sold  on  contract,  to  find  the  contract 
holders  living  on  the  premises  and  nothing  of  record  to  disclose 
their  rights.  A  Mortgagee  takes  subject  to  their  rights  and  might 
eventually  lose  the  entire  amount  of  the  loan,  as  the  contract  holder 
is  not  bound  to  pay  any  one  but  the  holder  of  the  legal  title.  He 
may  pay  out  his  entire  contract  obligation  and  hold  the  property  as 
against  a  Mortgage  made  by  his  vendor.  Many  instances  such  as 
this  have  occurred  in  this  community,  and  I  point  out  that  it  is 
absolutely  necessary   for  a   Mortgagee   to  ascertain   the   rights   of 

79 


parties  in  possession ;  otherwise  he  deals  at  his  peril.    Any  evidence 
of  occupancy  is  sufficient  to  put  him  upon  inquiry. 

In  making  loans  in  contemplation  of  the  erection  of  a  building, 
it  is  incumbent  upon  the  Mortgagee  to  see  that  no  labor  has  been 
performed  upon  the  premises  and  that  no  material  has  been  deliv- 
ered thereon  prior  to  the  recordation  of  his  Mortgage.  I  shall 
point  out  in  a  discussion  of  mechanics'  liens  that  if  he  does  not  do 
this  his  ^Mortgage  is  subject  to  all  liens  for  labor  and  material  that 
may  attach  subsequently. 

The  laws  which  apply  to  renewals  of  Mortgages  and  exten- 
sions thereof,  will,  I  am  certain,  be  of  peculiar  interest  to  you. 
The  maker  and  the  payee  may  mutually  agree  upon  an  extension  or 
renewal.  Renewal  is  affected  by  the  execution  of  new  instruments, 
and  if  it  be  in  fact  simply  security  for  the  same  debt  is  held  to  be  a 
continuance  of  the  former  lien.  The  maker  and  the  payee  may 
agree  to  extend  the  due  date  of  the  note  to  any  period  of  time. 
These  agreements  must  be  entered  into  by  all  parties  concerned, 
that  is,  the  maker,  the  payee  and  any  endorser  or  guarantor  on  the 
note.  The  holder  of  the  note  cannot  alone  extend  the  Statute  of 
Limitation  by  simply  stating  that  he  will  extend  the  due  date  of 
the  note;  neither  can  the  period  of  the  Statute  of  Limitation  be 
extended  to  the  prejudice  of  a  second  lien  holder  without  his  con- 
sent. He  is  entitled  to  rely  upon  the  records  as  he  finds  them  at  the 
time  that  he  takes  his  second  lien,  and  the  subsequent  act  of  the 
maker  and  payee  of  the  first  obligation  cannot  operate  to  his  detri- 
ment without  his  consent,  and,  if  the  period  of  limitation  be  extended 
and  foreclosure  be  not  brought  upon  the  first  obligation  before  the 
expiration  of  the  original  period  of  limitation,  the  second  lien 
holder  takes  precedence  and  has  a  first  lien.  I  will  give  a  simple 
illustration. 

A,  the  Mortgagor,  executes  his  note  and  Mortgage  to  B,  pay- 
able in  two  years.  The  Statute  of  Limitation  limiting  the  period 
within  which  A  can  sue  upon  his  obligation  is  four  years  from  the 
date  of  the  maturity  of  the  note,  provided  it  be  executed  within 
this  State,  and  two  years  if  it  be  executed  outside  of  the  State. 
A  then  borrows  on  a  second  Mortgage  from  C.  C  examines  the 
record  and  discovers  the  facts,  thereupon  he  loans  on  a  second 
Mortgage  to  C  relying  upon  the  record.  Afterward  A  and  B  cannot 
make  an  agreement  to  extend  the  payment  of  the  first  Mortgage 
which  will  affect  C  without  his  consent.  If  A  and  B  should  extend 
the  time  of  payment  of  the  first  Mortgage,  we  will  say  for  three 
years  as  between  them,  a  new  period  of  limitation  would  begin, 
to-wit,  at  the  last  named  maturity  date,  but  as  to  C,  he  having  not 
consented,  the  Statute  of  Limitation  begins  to  run  from  the  original 

80 


two  year  maturity  date.  If  A  therefore,  after  having  given  the 
extension  does  not  begin  his  action  to  foreclose  within  the  pre- 
scribed time  from  and  after  the  original  date  of  maturity  he  is 
barred  so  far  as  C  is  concerned,  and  when  C  forecloses  his  second 
Mortgage  A  cannot  even  set  up  a  claim.  It  would  be  demurred 
out  of  Court  on  the  ground  that  his  action  being  barred  as  to  the 
first  obligation,  he  could  not  assert  it  as  against  C.  It  is  therefore 
very  important  to  bear  this  in  mind,  that  when  extension  agreements 
are  to  be  made,  the  record  must  be  examined  and  the  consent  of 
all  parties  obtained.  If  it  be  impossible  to  secure  the  consent  of 
the  second  lien  holder,  then  do  not  extend  the  time  of  payment  of 
your  note  so  that  it  shall  fall  due  at  a  time  beyond  the  period  of 
limitation  reckoned  from  the  original  due  date. 

Renewals  and  extensions  require  a  consideration  to  support 
them  as  does  any  other  contract.  Thus,  the  forbearance  on  the 
part  of  the  Mortgagee  to  bring  action  to  foreclose  is  a  good  consid- 
eration and  will  support  an  agreement  of  extension  between  the 
original  Mortgagor  or  his  successor  in  interest  in  the  mortgaged 
property. 

When  a  note  is  endorsed  by  the  payee  thereof  in  blank  without 
any  other  contract,  this  liability  is  that  of  an  endorser  only,  and  he 
is  entitled  to  notice  of  subsequent  changes  in  the  contract.  If  he  be 
an  accommodation  endorser,  he  is  in  the  same  situation  as  the 
maker  of  the  note,  even  if  his  endorsement  appear  on  the  back  of 
the  note.  The  contract  of  guarantee,  however,  is  an  entirely  sep- 
arate obligation  from  that  incurred  by  the  execution  of  the  original 
note.  Where  endorsers  guarantee  the  payment  of  the  note  their 
contract  is  a  separate  one  and  may  be  sued  upon  without  suit  being 
brought  on  the  original  obligation.  Not  so,  however,  if  they  be  not 
guarantors.  It  must  be  borne  in  mind,  and  it  is  an  important  point, 
that  a  contract  of  guarantee  must  be  founded  upon  a  consideration. 
If  it  be  entered  into  simultaneously  with  the  original  obligation 
which  is  guaranteed,  that  is  sufficient  consideration,  and  no  other 
consideration  is  required.  However,  if  the  contract  of  guarantee 
be  entered  into  after  the  creation  of  the  first  obligation,  at  any  time 
later,  it  requires  a  separate  consideration  moving  to  the  guarantor 
to  support  the  contract. 

Many  Mortgages  read  that  they  are  given  to  secure  renewals 
of  the  original  obligation.  This  contract  is  binding  between  the 
Mortgagor  and  the  Mortgagee,  but  in  my  opinion,  is  no  notice  to 
any  other  person,  and  a  second  lien  holder  is  not  put  upon  notice 
of  possible  renewals.  In  other  words,  the  contract  for  renewals 
does  away  with  the  necessity  of  execution  of  new  papers,  but  the 
legal  requirements  are  the  same,  and  the  doctrine  of  notice  to  third 
parties  applies  as  if  no  mention  had  been  made  of  it. 

81 


lUKK£-i\5  LAW  LHALLKNGF 


'W 


\ 

\ 

(  ^,  ~c!,  as  is  no 

A  judgmeftt   challeriEfln^  thte  vrfluejhack  of  the  las*-  -^"^    recording    sys 
f  Torrens  land   certificates   has  ^1yg+ '  relti. '  rie    will   appeal,   sayinp   that   ( 

*he  decision  of  Judge  Works  is  upi 
held  it  will  compel  every  prcchasei 
or  mortgagee  of  land  registered  unA 
der  the  Torrens  svstein  to  make  an'i 
examination  of  the  records  to  de-' 
termine  whether  or  not  the  owner 
of   the    certificate   actually    owns    it.    j 


Jut 

'^^^ J}V^i<S'n  {s"one  which  w'iu  prove 
J^Jaj^P*  vital   Interest   to    holders   of   Tor- 
ens    certificates    an    it    will    have    a 
commun.  ,  .  .,    ^  ,      ,      •' 

ar-reachmg    effect    upon     lands    in 

Stand  as  hjg  county. 

of   law    1     The    action    nrose    following      the 
,,  ale  of   property  by  C.  H.   Bogart   to 

tne    payfjhanning  FoUette,  an  attorney,  with 
j-gCgJygfJ  jfilces  in  the  Security  Building.  Prior 
o    the    sale    of    the    property       Mr. 
are    Subji^ogart    made   a    deed    to    the    Pacific 
Lyight    and    Power    Conipany,    giving 
the  company     permisiioi^     to     erect 
poles  and   high  voltage   wires  across 
the  land. 

A  few  months  after  making  this 
deed  Mr.  Bogart,  with  several  of  his 
neighbors,  i  egistered  his  property 
under  the  Torrens  system,  butniade 
no  mention  of  the  power  company'a 
interest  in  the  land,  except  through 
a  notice  published  in  newspapers. 
The  purchaser  brought  suit  against 
the  power  company  to  settle  the 
question  of  ownership  of  this  part  of 
the  land,  rel\'ing  on  the  Torrens  cer- 
tificate. The  court  held  for  the  de- 
fendant. 

Attorney   Ray   B.   Schauer,   for  the 
plaintiff,    stated    that    property    own- 
ers  have   relied    iii)on   the    provisions 
of   the   law,   which    do   not    require   a' 
purchaser  to  examine  Into  the  title 


junior  I 
record 
makes 
be  ma. 
legal  ^ 
contere 
date  o^ 


tage 


,it 


clelivfc)- 

to  mj^^ 

gage  til 

the  d<,e 

from  '<^ 
al 

from 


For  The  Best  In 
Com  Flakes, 
says  {§066^,  ask 
the  ^ocer  for 

Post 
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41 


Ch 

LA  J 

A    jud 
of    'I'oir 

been    ha  ,_ .>..,,_  . 

Tlie  dt'cision  is  one  which  will  lytove 
of  vital  interest  to  holders  of  'i"or- 
rens  certificates  as  it  will  have  a  far- 
renching  effect  upon  lands  in  this 
county. 

The  action  arose  following  tha  sale 
of  propeity  by  C  H.  Bogart  to  Chan- 
ning  Follette,  an  attorney,  with  ofllccs 
in  the  Security  Building.  Prior  to  the 
sale  of  the  property  Mi-.  Rogart  made 
a  deed  to  the  Pacific  Light  and  Po.v- 
er  Company,  giving  the  company  per- 
mission to  erect  poles  and  high  vj;t- 
age  wires  across  the  l^ind- 

A  few  months  after  making  this 
deed  Mr.  Bogart,  with  several  of  his 
neighbors,  registered  his  property  im- 
dcr  the  Ton-ens  system,  but  made  no 
nifMition  of  the  power  company's  in- 
terest in  the  land,  except  through  <'i 
notice  puV)lished  in  new.spapers.  The 
purchaser  brought  suit  again.st  the 
power  company  to  settle  the  question 
of  owneiship  of  this  part  of  the  land, 
relying  on  the  Toi  len.s  certificate.  The 
court    held    for   the   defendant. 

Attoiney  ^lay  li.  Schauer,  for  the 
ohiiiilitT.  stilted  tliMl  prop<>rty  owner.-! 
have  relied  upon  the  provisions  of  the 
law,  which  do  not  require  a  purchaser 
tv  examine  into  the  title  back  of  the 
last  certificate,  as  is  now  required  un- 
der the  recording  system.  He  will  ap- 
peail,  saying  that  if  the  decision  of 
.Judge  Works  is  upheld  it  will  compel 
eveiy  purchaser  of  mortgages  of  land 
registered  under  the  Toncns  system 
to  make  an  examination  o?  the  records 
to  doteimine  whether  or  not  the  owner 


k 


can  be  collected ;  for  the  Statutes 

3t  paid  it  shall  thereafter  bear  the 

ipal. 

I  very  important  topic ;  that  is  to 

:t  as  regards  Mortgage  and  Trust 

:  at  present  exists,  if  unaffected  by 
places  his  Mortgage  with  the 
note  as  evidence  of  the  indebted- 
fed  in  full,  carefully  compared  and 
aining  a  permanent,  legible  public 
d  which  can  be  produced  in  any 
hip  of  the  security  or  the  title  to 
6.  from  which  copies  can  be  made 
knilar  purpose.  The  document  is 
las  the  convenience  of  possession 
prence  at  any  time  when  required 
le  destruction  of  the  record  itself. 


^2 


>1 


What  the  Bar  Association  Thinks  of 
Torrens  Lawyers 


The  Committee  on  Legal  Ethics,  of 
the  Los  Angeles  Bar  Association, 
published  in  the  Los  Angeles  Daily 
Journal,  the  following  opinion  con- 
cerning a  Torrens  Title  Lawyer, 
who  practices  law  under  the  name 
of  a  fictitious  Torrens  Title  Company, 
and  also  rendered  an  opinion  concern- 
ing the  professional  ethics  of  attorneys 
who  use  these  methods  in  securing 
legal   business. 

"ATTORNEY'S  NAME  AND 
DESIGNATION  AS  ATTOR- 
NEY APPEARING  UPON 
LETTERHEAD  OF  A  BUSI- 
NESS FIRM  WHICH  THERE-  ># 
ON  ADVERTISES  ITS  " 
PRACTICE  OF  LAW. 

"The  letterhead  in  this  instance, 
except  for  the  omission  of  the 
manager's  name,  the  attorney's 
name,  office  and  phone  number, 
was  as  follows : 
'Mgr.  Atty.' 

PROPERTY  OWNER'S  GUIDE 

Offices 

Titles  examined  Building 

Land  appraised 
Defects  removed  Los  Angeles,  Cal., 

Loans   made 
Certificates  run  down  Phone 

Legal   advice    on    all    law   and 

equity  matters 
Escrows   handled 

\AT  £^     ixTilI     cn-^TPi    ir/Mi     mrinp^r 


Protective    Association,    64    C.    D. 
253. 

"In  an  opinion  of  this  Committee 
of  December   16,    1921,  it   was  de- 
cided   that    it    was    unprofessional 
for  an  attorney  to  assume  to  prac- 
tice   law    under    a    fictitious    firm 
name,   to   which   opinion   reference 
is    here    made    for    a    further    dis- 
cussion of  the  subject." 
The  Legal   Ethics  Committee  of  the 
Bar    Association    is    composed    of    the 
following    lawyers    whose    standing    at 
the    Bar    gives    additional    weight    to 
the  opinion   rendered   by  them: 

\r'-'%    Hubert  T.  Morrow 
'  Jesse  F.  Waterman 
Herbert  J.  Goudge 
Elizabeth    L.    Kenney 
Lucius   K.   Chase 
N-^/p   Herbert   Freston 
'c  ilobcrt  AL   Fulton 

The  attorney  who  received  the  above 
professional  rebuke  at  the  hands  of  the 
Bar  Association  has  been  circularizing 
the  county  urging  land  owners  to  pa- 
tronize his  Torrens  Title  Company. 
He  failed  to  state  anywhere  in  the  let- 
ter that  he  desires  more  registrations 
so  that  he  can  increase  his  annual  in- 
come. 

In  these  letters,  among  other  state- 
ments equally  unfounded,  he  says  that 
the  number  of  Torrens  applications 
are    rapidly    growing.      The    following 


O 

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g    ^ 
b   S   2i 


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C^     -i-* 


5.^  ^'S)  o  >>^ 

o 


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X5 


M  ^  :i 


O      o    ^      ?      O 


•Srl^H 


3     C:-'^   H 


■^  ;- 


"    o    >  •- 


-T3 
o 
C 


<^  fi  </> 

■fcfl   o  -^ 


o 

i;    i«   c  -=. 


bo 

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O     o   -^ 


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o  rz 


q      4J 


6  ^ 


6 

3 


--     f3       P         I 


o 

w 

o 
o 


KN^^^  ",\ii^"'"^^"^"^  ^^^  vrfluelhack  of  the  last  certificaf- 
^   Y^  '^  land   certificates  has  jusd  required     under    ♦^ 

^   "^r««^nded  down  by  Judge  W*-^-' 


Many  Mortgages,  and  most  of  the  Trust  Deeds  used  in  this 
community,  provide  for  further  advancements,  the  instrument  to 
stand  as  security  therefor.  It  is  important  to  observe  certain  rules 
of  law  here.  If  the  advancements  to  be  made  are  optional  with 
the  payee,  any  advancements  which  he  may  make  after  he  has 
received  actual  notice  of  intervening  rights  of  second  lien  holders 
are  subject  to  the  rights  of  the  second  lien  holders  and  become 
junior  to  their  claims.  This  must  be  actual  notice  to  him  and  not 
record  notice,  as  he  is  not  bound  to  search  the  records  before  he 
makes  additional  advances.  This  is  not  true  when  the  advances  to 
be  made  are  obligatory  upon  the  payee.  In  short,  if  he  is  under  a 
legal  obligation  to  make  the  advances  in  any  event,  then  the  law 
contemplates  that  the  money  has  been  actually  paid  over  at  the 
date  of  the  instrument.  No  subsequent  lien  holder  can  take  advan- 
tage of  the  fact  that  the  money  was  not  all  paid  at  the  date  of 
delivery  of  the  note.  Thus,  where  it  is  obligatory  upon  the  payee 
to  make  advances,  as  for  instance  in  a  building  loan  where  a  Mort- 
gage is  given,  say  for  $5,000.00,  and  but  $1,000.00  is  advanced  at 
the  date  of  the  Mortgage,  the  Mortgagee  may  pay  out  the  balance 
from  time  to  time  without  regard  to  notice,  actual  or  constructive, 
from  any  subsequent  lien  holder. 

A  little  point  of  interest  to  many  loaners  is  this :  that  when  an 
excessive  rate  of  interest  is  charged  upon  interest,  as  for  instance, 
where  the  note  reads  that  the  interest  is  6  per  cent  per  annum, 
payable  annually,  and  if  not  so  paid  said  interest  shall  thereafter 
bear  interest  at  12  per  cent  per  annum,  renders  the  entire  contract 
for  interest  void,  and  no  interest  can  be  collected ;  for  the  Statutes 
prescribe  that  if  the  interest  is  not  paid  it  shall  thereafter  bear  the 
same  rate  of  interest  as  the  principal. 

I  come  now  to  touch  upon  a  very  important  topic ;  that  is  to 
say,  the  effect  of  the  Torrens  Act  as  regards  Mortgage  and  Trust 
Deeds. 

Under  the  recording  act,  as  it  at  present  exists,  if  unaffected  by 
the  Torrens  Act,  a  Mortgagee  places  his  Mortgage  with  the 
recorder  of  record,  retaining  the  note  as  evidence  of  the  indebted- 
ness. The  Mortgage  is  transcribed  in  full,  carefully  compared  and 
certified  by  the  recorder,  thus  obtaining  a  permanent,  legible  public 
record  of  the  document,  a  record  which  can  be  produced  in  any 
proceeding  involving  the  ownership  of  the  security  or  the  title  to 
the  property  thus  incumbered  and  from  which  copies  can  be  made 
and  certified  to  be  used  for  a  similar  purpose.  The  document  is 
returned  to  the  Mortgagee  who  has  the  convenience  of  possession 
of  the  original  instrument  for  reference  at  any  time  when  required 
and,  in  the  improbable  event  of  the  destruction  of  the  record  itself, 

9- 1     "  ■■■  ;   ' 9 

51  c,,--?n   oo.iOAip  oo.ioap  n^uiji 


What  the  Bar  Association  Thinks  of 
Torrens  Lawyers 


f 


The  Committee  on  Legal  Ethics,  of 
the  Los  Angeles  Bar  Association, 
published  in  the  Los  Angeles  Daily 
Journal,  the  following  opinion  con- 
cerning a  Torrens  Title  Lawyer, 
who  practices  law  under  the  name 
of  a  fictitious  Torrens  Title  Company, 
and  also  rendered  an  opinion  concern- 
ing the  professional  ethics  of  attorneys 
who  use  these  methods  in  securing 
legal  business. 

"ATTORNEY'S  NAME  AND 
DESIGNATION  AS  ATTOR- 
NEY APPEARING  UPON 
LETTERHEAD  OF  A  BUSI- 
NESS FIRM  WHICH  THERE-  ' 
ON  ADVERTISES  ITS 
PRACTICE  OF  LAW. 

"The  letterhead  in  this  instance, 
except  for  the  omission  of  the 
manager's  name,  the  attorney's 
name,  office  and  phone  number, 
was  as  follows: 
'Mgr.  Atty.' 

PROPERTY  OWNER'S  GUIDE 

Offices 
Titles  examined  Building 

Land  appraised 
Defects  removed  Los  Angeles,  Cal., 

Loans  made 
Certificates  run  down  Phone 

Legal   advice    on    all    law   and 

equity  matters 
Escrows  handled 

We  will  save  you  money 
Abstracts   made 
Estates  probated 

See  us  first.' 
"Upon  complaint  to  this  Bar  As- 
sociation, the  above  letterhead  was 
apparently  discarded,  the  firm's 
name  changed,  and  the  following, 
except  for  similar  exceptions  above 
noted,  substituted  for  the  firm's 
use,  viz.: 

"SECURE  A  TORRENS  TITLE 
—IT'S  A  STATE  GUARAN- 
TEE—BEST TITLE  IN  THE 
WORLD. 

STATE   TORRENS   TITLE 
COMPANY 

Estates    probated 
Real  estate  and  loans 
Titles  quieted  Chief  Counsel 

Abstracts   escrows 
Legal  advice 

Torrens   titles 
General  Agents  Building 

Los  Angeles,  Calif.  Phone 

"The  attorney  acted  as  counsel 
for  the  above  institutions  and 
knowingly  permitted  the  use  of  his 
name  upon  such  letterheads.  He 
thereby  violated  the  Canons  of 
Legal  Ethics,  and  his  conduct  was 
unprofessional.  Each  of  said  in- 
stitutions by  its  respective  letter- 
head advertised  the  practice  of 
law,  whereas  the  practice  of  law  by 
other  than  natural  persons  is  pro- 
hibited by   the   Law  of  this   State. 

People  etc.  ex  rel.  Lawyers'  In- 
stitute of  San  Diego  v.  Merchants 


Protective    Association,    64    C.    D. 
253. 

"In  an  opinion  of  this  Committee 
of  December   16,    1921,  it   was  de- 
cided   that    it    was    unprofessional 
for  an  attorney  to  assume  to  prac- 
tice   law    under    a    fictitious    firm 
name,   to   which   opinion   reference 
is    here    made    for    a    further    dis- 
cussion of  the  subject." 
The  Legal   Ethics  Committee  of  the 
Bar    Association    is    composed    of    the 
following    lawyers    w-hose    standing    at 
the    Bar    gives    additional    weight    to 
the  opinion   rendered   by   them: 
Vj-  ,  V    Hubert  T.  Morrow 
Jesse  F.  Waterman 
Herbert  J.  Goudge 
Elizabeth    L.    Kenney 
Ludus   K.   Chase 
.:'V    Herbert  Freston 
Robert  M.   Fulton 

The  attornci'  who  received  the  above 
professional  rebuke  at  the  hands  of  the 
Bar  Association  has  been  circularizing 
the  county  urging  land  owners  to  pa- 
tronize his  Torrens  Title  Company. 
He  failed  to  state  anj-where  in  the  let- 
ter that  he  desires  more  registrations 
so  that  he  can  increase  his  annual  in- 
come. 

In  these  letters,  among  other  state- 
ments equally  unfounded,  he  says  that 
the  number  of  Torrens  applications 
are  rapidly  growing.  The  following 
table  compiled  from  the  public  records 
of  Los  Angeles  County  shows  year  by 
year  the  total  number  of  petitions  filed 
and  the  total  number  of  parcels  of 
land  included  in  all  the  petitions.  It 
will  be  seen  that  seventy-three — the 
high  water  mark — were  filed  in  1916 
and  that  year  by  year  the  petitions  are 
growing  less  and  less  as  are  the  par- 
cels of  property  being  placed  under 
the  Torrens  Law.  No  deduction  is 
made  in  the  table  for  parcels  with- 
drawn from  the  petitions  before  they 
were  registered. 

Petitions  Filed  1916  to  1922  Inclusive. 

Total  Parcels 
Total  of  Land 

Petitions        Included  in 
Year  Filed  Petitions. 

1916  73  1099 

1917  61  2076 

1918  69  1685 

1919  71  1547 

1920  35  618 

1921  23  353 

1922  21  271 

At  the  present  time  the  use  of  the 
Torrens  Law  in  Los  Angeles  County 
is  comparatively  negligible.  This  in 
spite  of  the  fact  that  during  the  past 
few  years  real  estate  transactions  have 
been  more  active  than  at  any  other 
time  in  the  history  of  California. 

It  would  seem  that  the  property 
owners  have  not  the  confidence  in  the 
Torrens  system  that  the  Torrens  law- 
yers would  wish  them  to  have. 


Reprint  from  Financial-Insurance  IVeirs  of  Feb.  3,  1  923 


lUKKIirNS  LAW  LHALLliiVGEi 


A  judgmeni  challene^ln^ 
if  Torrens  land   certificates   has  jus^l ''^^luired     under 
,4_>w  '-'•rided  down  by  Judge  "W*r-- 


lelhack  of  the  last  certificate 


Many  Mortgages,  and  most  of  the  Trust  Deeds  used  in  this 
community,  provide  for  further  advancements,  the  instrument  to 
stand  as  security  therefor.  It  is  important  to  observe  certain  rules 
of  law  here.  If  the  advancements  to  be  made  are  optional  with 
the  payee,  any  advancements  which  he  may  make  after  he  has 
received  actual  notice  of  intervening  rights  of  second  lien  holders 
are  subject  to  the  rights  of  the  second  lien  holders  and  become 
junior  to  their  claims.  This  must  be  actual  notice  to  him  and  not 
record  notice,  as  he  is  not  bound  to  search  the  records  before  he 
makes  additional  advances.  This  is  not  true  when  the  advances  to 
be  made  are  obligatory  upon  the  payee.  In  short,  if  he  is  under  a 
legal  obligation  to  make  the  advances  in  any  event,  then  the  law 
contemplates  that  the  money  has  been  actually  paid  over  at  the 
date  of  the  instrument.  No  subsequent  lien  holder  can  take  advan- 
tage of  the  fact  that  the  money  was  not  all  paid  at  the  date  of 
delivery  of  the  note.  Thus,  where  it  is  obligatory  upon  the  payee 
to  make  advances,  as  for  instance  in  a  building  loan  where  a  Mort- 
gage is  given,  say  for  $5,000.00,  and  but  $1,000.00  is  advanced  at 
the  date  of  the  Mortgage,  the  Mortgagee  may  pay  out  the  balance 
from  time  to  time  without  regard  to  notice,  actual  or  constructive, 
from  any  subsequent  lien  holder. 

"pany  loaners  is  this :  that  when  an 
ged  upon  interest,  as  for  instance, 
nterest  is  6  per  cent  per  annum, 
paid  said  interest  shall  thereafter 
nnum,  renders  the  entire  contract 
can  be  collected ;  for  the  Statutes 
Dt  paid  it  shall  thereafter  bear  the 
pal. 

I  very  important  topic ;  that  is  to 
t  as  regards  Mortgage  and  Trust 


A     \l*.i.\. 


.4-n_~ni.       t.~ 


W    Challenge  Torrens  Law 

LA  Journai — 87^/19 

A ■  judgtment  challenging  the  value 
of  Torrens  land  certificates  has  just 
been  handed  down  by  .Judge  Work.s. 
Tlie  d<'cisi«n  is  one  which  will  prove 
of  vital  interest  to  holders  of  'I'or- 
rens  certiticates  as  it  will  have  a  far- 
reaching  effect  upon  lands  in  this 
county. 

'I'he  action  arose  following  ths  salo 
of  property  by  C  H.  Bogart  to  Chan- 
ning  FoUette,  an  attorney,  with  oniccs 
in  the  Security  Building.  Prior  t  j  the 
sale  of  the  property  M)-.  Bogart  made 
a  deed  to  the  Pacific  LigVit  and  l*o,v- 
er  Company,  giving  the  company  por- 
mi.ssion  to  erect  poles  and  high  volt- 
age wires  across  the  l(ind- 

A  few  months  after  mnking  this 
deed  Mr.  Bogart,  with  .several  of  his 
neighbors,  legistered  his  property  un- 
der the  Toii-ens  system,  but  made  no 
mention  of  the  power  company's  in- 
terest in  the  land,  except  through  m 
notice  published  in  new.spapers.  The 
purcha.ser  brought  suit  against  the 
power  company  to  settle  the  question 
of  ownei-sliip  of  this  part  of  the  land, 
relying  on  the  Toi-rens  certificate.  The 
court   held    for   the   defendant. 

Attorney  ^^.ay  B.  Schauer,  for  the 
Tilaintiff.  stated  that  property  owner.-; 
have  relied  mMm  the  provisions  of  the 
law,  w'hich  do  not  require  a  purchaser 
to  examine  into  the  title  back  of  the 
last  certificate,  as  is  now  rec(uired  un- 
der the  lecordiTig  system.  He  will  ap- 
pearl,  .saying  that  if  the  decision  of 
.iud<e  Works  is  upheld  it  will  compel 
every  purchaser  of  mortgages  of  land 
registered  under  the  Torrens  system 
to  make  an  ex.tmination  o?  the  records 
to  determine  whether  or  not  the  owner 


;  at  present  exists,  if  unaffected  by 
places  his  Mortgage  with  the 
note  as  evidence  of  the  indebted- 
ed  in  full,  carefully  compared  and 
aining  a  permanent,  legible  public 
d  which  can  be  produced  in  any 
[lip  of  the  security  or  the  title  to 
[i  from  which  copies  can  be  made 
nilar  purpose.  The  document  is 
las  the  convenience  of  possession 
rence  at  any  time  when  required 
le  destruction  of  the  record  itself, 


;2 


—  .. — ^vi  iiuTC  procures  the  record 


lUKKJii\^  LAW  LHALLENGEi 

•     i  /(  ^ ' " 

A  judgmefit   ohallenVlti^  thfe  v«ru'ie|hack  of  the  last  certificate 
f  Torrens  land  certificates  has  jus^    '"^Quired     under    *^ 
.j^^"-  '■"'nded  down  bv  Judgre  TV*'^-" 

Many  Mortgages,  and  most  of  the  Trust  Deeds  used  in  this 
communiti J  provide  for  further  advancements,  the  instrument  to 


CD 

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pearl,    snying    ■..••v    —  ■  j, „      ~~~  -^    i-    = 

Jii(l<f  Works  is  iipheW'ft  M'ill  compoi 
every  purchaser  of  niortsapres  of  laiul 
r(i?ist«'i-(d  under  the  Torrens  systi'm 
to  make  an  examination  o?  the  records 
to  determine  whellier  or  not  the  owner 


of    t  llf>    rT'l-f  \V\i':\\\ 


•I  r»^  no  II\'' 


rit«'n  c 


c  3  :;:    s 


~    o 


O    JC 


o    rt 


'^  "^  '^    5    m 


retains  the  original  which  can  be  again  recorded  if  thought  desirable 
or  necessary.  The  holder  of  a  Trust  Deed  note  procures  the  record 
of  the  Deed  of  Trust  which  is  either  returned  to  him  or  to  the 
Trustee,  thus  securing  also  a  permanent  record  as  well  as  the 
custody  or  the  right  of  convenient  access  to  inspect  the  original. 

Under  the  registration  system,  after  property  has  been  first 
registered,  an  original  Mortgage  is  left  with  the  registrar  and  filed 
under  a  document  number  in  his  office.  It  is  not  transcribed.  Only 
a  brief  notation  of  its  contents  is  endorsed  upon  the  certificate  of 
title.  No  permanent  record  is  made.  The  Mortgagee  has  neither 
the  original  document  nor  can  he  be  certain  that  the  original  will 
be  accessible.  His  only  security  would  be  to  procure  a  copy  showing 
filing  endorsements  certified  by  the  registrar.  In  the  event  of  loss 
of  the  original  from  any  cause  such  a  copy  would  be  treated  as  a 
duplicate,  but  its  exact  status  is  not  defined  by  the  act.  Under  this 
plan  the  Mortgagee  can  at  the  best  secure  nothing  more  than  a 
certified  copy  of  an  instrument  of  which  there  is  no  permanent 
record,  and  w^hich,  even  if  it  be  in  the  registrar's  office,  might  be 
hopelessly  misplaced  in  the  event  that  the  system  comes  into  general 
use,  as  the  task  of  filing  several  hundred  documents  a  day  would  be 
a  very  difBcult  undertaking  and  errors  would  necessarily  occur. 

Consideration  should  also  be  given  to  the  fact  that  registration 
under  the  terms  of  the  Act  adopted  in  November,  1914,  is  ordinarily 
based  upon  an  application  by  the  owner  setting  forth  only  that  he 
and  his  predecessors  in  interest  have  owned  the  land  and  have 
been  in  actual  and  adverse  possession  of  the  same  and  paid  all 
taxes  and  assessments  levied  thereon  for  more  than  five  years 
preceding  the  application.  Where  this  allegation  is  made  in  the 
petition,  no  abstract  or  proof  of  the  early  title  is  required  and  if 
these  facts  be  alleged  and  shown,  as  they  ordinarily  are,  by  the 
testimony  of  one  witness,  no  investigation  is  made  at  all  as  to  the 
antecedent  title.  In  accordance  with  the  theory  of  the  act,  as  will 
be  hereinafter  shown,  a  decree  based  upon  such  an  application  and 
showing  is  binding  upon  all  the  world  and  terminates  without 
other  or  further  notice  any  valid  existing  easement  or  adverse 
right  or  claim. 

The  original  application  made  by  the  owner  of  the  fee  title 
must  set  forth,  among  other  things,  whether  the  property  is  subject 
to  any  easement,  lien  or  incumbrance,  and,  if  so,  the  name  and  post 
office  address,  if  known,  of  each  holder;  the  nature  and  amount  of 
the  same  and  book  and  page  of  record,  if  recorded.  While  this 
requirement  is  found  in  the  law  there  is  no  method  provided  to 
enforce  compliance,  because,  as  above  stated,  in  the  ordinary  appli- 
cation, no  investigation  is  made  of  the  title  beyond  ascertaining 

83 


possession  and  payment  of  taxes  for  the  period  of  five  years  preced- 
ing, each  petition  containing  a  statement  of  possession  for  the  pre- 
scribed period,  so  that  no  investigation  is  made  by  the  Court  as  to 
title  prior  to  that  time. 

The  Act  further  provides  that  while  the  fee  simple  title  must  be 
first  registered,  the  fact  that  land  is  encumbered  is  no  objection  to 
bringing  it  under  the  system ;  that  all  liens  must  be  noted  upon  the 
certificate  of  title  issued  by  the  registrar  and  that  the  title  so 
certified  by  him  shall  be  subject  only  to  the  liens  therein  set  out 
except  as  otherwise  provided  in  the  Act ;  also  that  filing  of  the 
application  in  the  county  clerk's  office  shall  be  sufficient  notice  to  all 
subsequent  purchasers  or  incumbrancers.  When  satisfied  of  the 
sufficiency  of  the  application,  the  Court  orders  issuance  of  a  notice 
which  shall  be  directed  to  all  parties  appearing  by  the  petition  and 
abstract,  or  by  the  report  of  the  examiner  of  titles,  to  have  any 
interest  in  the  land  or  any  part  thereof  and  setting  forth,  among 
other  matters,  the  names  of  all  applicants,  description  of  the  land 
involved  and  a  statement  of  the  filing  of  the  petition  for  registra- 
tion "which  notice  shall  direct  all  whom  it  may  concern  to  appear 
and  answer  said  petition"  within  a  specified  time.  This  notice  must 
be  published  four  weeks,  and,  in  addition,  personal  service  must  be 
had  upon  all  parties  not  joined  in  the  petition  who  appear  to  be 
interested  in  the  fee  of  the  property,  all  occupants  named  in  the 
petition  and  the  husband  and  wife  of  married  applicant.  Personal 
service  must  also  be  made  owners  of  all  adjacent  lands  and  in 
certain  cases  upon  the  authorities  of  the  municipality  or  county. 
No  service  of  any  notice  upon  a  Mortgagee  or  the  holder  of  any 
incumbrance  or  lien  upon  the  premises  is  required,  or  provided  for, 
although  the  decree  must  determine  the  rights  of  these  parties. 
Apparently  it  is  contemplated  that  this  be  done  without  their  being 
brought  into  the  proceedings.  After  service  is  complete  the  Court 
after  hearing  enters  its  decree  and  also  in  such  manner  as  to  show 
their  relative  priority  all  Mortgages,  liens  or  incumbrances  of  any 
kind.  A  certified  copy  of  this  decree  is  deposited  with  the  registrar 
who  thereupon  issued  his  certificate  bringing  the  land  formally 
under  the  Act,  setting  forth  in  substance  the  finding  of  the  decree 
as  to  vesting  of  title,  nature,  amount  and  order  of  priority  of  liens, 
and  the  efifect  of  entry  of  the  decree  is  thus  defined  in  the  Act : 

"Sec.  16  .  A  decree  of  the  Court  ordering  registration  shall  be 
in  the  nature  of  a  decree  in  rem,  shall  forever  quiet  the  title  to  the 
land  therein  ordered  registered  and  shall  be  final  and  conclusive  as 
against  the  rights  of  all  persons,  known  and  unknown,  to  assert  any 
estate,  interest,  claim,  lien  or  demand  of  any  kind  or  nature  whatso- 
ever, against  the  land  so  ordered  registered  or  any  part  thereof, 
except  only  as  in  this  Act  provided." 

84 


The  Act  excepts  from  the  effect  of  registration  and  provides 
that  the  title  registered  shall  be  subject,  in  addition  to  the  matters 
set  forth  in  the  decree,  to  any  lease,  verbal  or  otherwise  for  a  period 
not  exceeding  a  year,  to  certain  easements  or  exceptions  for  highway 
purposes,  to  any  right  of  way  or  other  easement  created  within  a 
year  before  the  issuance  of  the  certificate,  to  any  tax  or  special 
assessment  for  which  a  sale  of  the  land  has  not  been  made  at  the 
date  of  the  certificate  of  title,  to  the  right  of  action  allowed  by  the 
Act  (which  is  for  one  year  following  the  first  registration)  and  to 
liens,  claims  or  rights  arising  under  the  laws  of  the  United  States 
which  cannot  be  required  to  be  shown  in  a  State  record.  The 
registrar,  when  copy  of  the  decree  ordering  registration  is  filed  with 
him,  issues  in  duplicate  certificate  of  title  in  accordance  therewith, 
retaining  the  original  in  his  office  and  delivering  the  duplicate  to 
the  owner.  Thereafter  no  voluntary  transaction  can  affect  registered 
land  unless  the  following  requirements  be  complied  with.  The 
instrument  offered  for  filing  must  have  noted  upon  it  a  statement 
that  the  land  sought  to  be  affected  is  registered,  the  name  of  the 
registered  owner  and  number  or  numbers  of  last  certificate  of  regis- 
tration, otherwise  such  instrument  must  not  be  filed,  or,  if  filed,  is 
of  no  effect.  In  addition  every  voluntary  instrument  must  contain 
or  have  endorsed  upon  it  the  name,  residence  and  postoffice  address 
of  every  person  who  acquires  or  claims  an  interest  under  such 
instrument.  Papers  thus  prepared  and  presented  to  the  registrar 
will  not  then  be  filed  by  him  unless  there  be  also  presented  the 
owner's  duplicate  certificate  of  title  in  order  that  the  same  endorse- 
ment which  is  made  upon  the  original  may  be  made  upon  the  copy. 
It  therefore  follows  that  a  Mortgagee  holding  a  Mortgage  upon 
legistered  land  could  not  assign  the  same  unless  he  obtained  from 
the  Mortgagor  and  presented  with  the  assignment  the  owner's 
duplicate  certificate  of  registration.  Moreover,  if  the  Mortgagee 
sought  either  to  assign  or  release  a  Mortgage  by  an  attorney-in- 
fact,  in  addition  to  the  other  requirements,  the  power  of  attorney 
must  not  only  have  been  filed  with  the  registrar,  but  a  notation 
thereof  must  have  been  entered  not  only  upon  the  original  certifi- 
cate, but  also  upon  the  duplicate  certificate  which  the  owner  has  in 
his  possession.  No  method  is  provided  for  preserving  in  the  regis- 
trar's office  a  record  of  the  fact  that  endorsements  required  by  law 
to  be  made  upon  the  duplicate  certificate  have  been  so  made,  the 
Act  simply  providing  that  such  action  must  be  taken. 

The  duplicate  certificate  of  title  in  the  possession  of  the  owner 
of  the  property  is  his  only  evidence  of  ownership,  as  he  would  have 
no  deed,  except  possibly  a  certified  copy  of  one  on  file.  Either  the 
Mortgagee  must  obtain  this  from  the  Mortgagor  and  retain  it  in  his 

85 


possession  or  he  will  be  subject  to  great  annoyance  in  executing  any 
papers  affecting  the  Mortgage.  Neither  a  release,  nor  assignment, 
even  if  executed  in  person  and  complying  otherwise  with  all  of  the 
requirements  of  the  Act  would  be  received  for  filing  by  the  regis- 
trar, nor  would  they  be  entered  upon  the  register  by  him  without 
production  of  the  duplicate  certificate  of  title,  and  until  so  entered 
they  are  of  no  effect  even  though  the  consideration  therefor  has 
been  paid.  Even  a  deed  between  the  parties,  until  filed  and  reg- 
istered, takes  effect  only  as  a  contract  to  convey.  The  status  of  a 
Mortgagee  of  unregistered  property,  after  an  application  to  register 
the  title  thereto  has  been  filed,  is  difficult  to  determine.  i\s  above 
noted,  filing  the  application  has  the  effect  of  a  lis  pendens  so  far  as 
subsequent  incumbrancers  are  concerned.  No  provision  is  made  as 
to  prior  incumbrancers.  It  is  provided  that  incumbrances  upon 
registered  land  may  be  enforced  as  now,  or  hereafter,  provided  by 
law  and  that  the  laws  referring  to  release  or  satisfactions  or  mort- 
gages or  foreclosures  of  Mortgages  shall  apply  to  Mortgages  upon 
registered  land  except  that  until  notice  of  the  pendency  of  a  suit 
to  foreclose  is  filed  in  the  registrar's  offfce,  and  noted  upon  the 
certificate  of  title  the  filing  of  such  action  to  foreclose  is  not  notice 
to  any  person  dealing  with  the  land.  Apparently  this  makes  it 
impossible  to  foreclose  a  Mortgage  upon  land  upon  which  an  appli- 
cation for  registration  has  been  filed  and  no  decree  entered  or  certifi- 
cate issued.  In  preparing  the  Act  no  thought  seems  to  have  been 
given  to  the  status  of  the  title  during  the  period  intervening  between 
filing  the  application  and  entry  of  the  decree.  The  minimum  period 
necessary  for  this  is  at  least  sixty  days  and  more  frequently  more 
than  ninety  days.  Reference  has  already  been  made  to  the  necessity 
of  producing  the  owner's  certificate  at  every  transaction.  If  it  be 
lost  or  misplaced  a  copy  cannot  be  obtained,  but  application  must 
be  made  to  the  Court  and  proof  produced  and  a  decree  authorizing 
the  issuance  of  a  duplicate  rendered  before  the  registrar  is  author- 
ized to  issue  this  document.  If  the  registered  owner  of  the  property 
changes  his  or  her  name  by  reason  of  marriage,  divorce  or  other 
legal  proceeding  application  is  required  to  be  made  to  Court  and  a 
decree  and  new  certificate  must  be  issued  in  the  same  manner  as 
above  indicated  before  any  further  notations  can  be  made  upon  the 
original  register. 

No  person  may  bring  an  action  to  assert  any  interest  or  right 
in  registered  land  or  any  lien  or  demand  upon  the  same  adverse  to 
the  interest  certified  after  one  year  has  elapsed  following  first 
registration.  Just  what  effect  this  might  have  upon  the  rights  of  a 
Mortgagee  under  a  Mortgage  executed  prior  to  registration  is  not 
clear,  but  whether  executed  prior  to  registration  or  not  it  will  doubt- 

86 


less  be  subject  afterward  to  the  Act  if  the  Mortgagee  is  served  with 
notice  of  the  proceedings. 

If  a  Mortgagee  or  holder  of  a  Trust  Deed  note  should,  through 
the  excess  of  caution  of  the  applicant,  be  served  with  a  notice  in 
proceedings  to  register  the  title  it  would  be  absolutely  necessary 
for  him  to  appear  and  plead  to  protect  his  interests.  He  cannot 
be  heard  to  object  to  registration,  but  if  brought  into  the  suit  or 
voluntarily  appearing  he  can  endeavor  to  protect  his  rights  and 
claims.  Registration  may  be  had  not  only  without  his  knowledge, 
but  also  against  his  protest  and  in  view  of  the  specific  provisions, 
oft  repeated  in  the  Act,  that  the  certificate  of  title  issued  by  the 
registrar  defines  the  rights  of  the  parties,  it  is  of  the  utmost  import- 
ance to  the  creditor  that  he  take  every  precaution  to  see  that  his 
lien  is  correctly  set  ^orth  in  the  certificate  which  forms  the  title. 
Whether  he  appears  or  not,  the  Act  provides  that  his  security, 
whether  represented  by  Mortgage  or  Trust  Deed  shall,  after  regis- 
tration, be  held  by  him  subject  in  all  respects  to  the  terms  of  the 
registration  Act  the  same  as  though  it  had  been  executed  after  the 
title  had  been  registered. 

This  involves  the  employment  of  an  attorney  at  the  Mortgagee's 
expense,  as  under  the  present  form  of  Mortgage  this  could  not  be 
charged  to  the  owner  of  the  property.  The  importance  of  this 
appearance  must  not  be  lost  sight  of;  in  fact,  it  would  seem  that  a 
Mortgagee  must  constantly  be  on  the  lookout,  as,  if  there  be  no 
legal  requirement  to  notify  him,  registration  might  be  effected 
without  his  knowledge  and  if  the  Act  be  valid  and  his  interest  be 
incorrectly  stated  either  as  to  amount  or  order  of  preference  with 
respect  to  other  liens,  he  would  be  absolutely  precluded  after  the 
lapse  of  one  year  from  asserting  any  other  interest  with  respect  to 
the  land  than  that  certified  in  the  decree.  Some  recent  occurrences 
amply  justify  this  conclusion  and  indicate  that  the  owner  should 
also  be  alert.  In  one  case  a  decree  entered  since  January  1st,  1916, 
omitted  a  $5,000.00  Mortgage  which  was  shown  by  the  pleadings 
but  not  set  forth  in  the  decree,  until  it  had  been  corrected  subse- 
quent to  its  first  entry.  In  another  case  the  verified  answer  of  the 
Mortgagee  showed  that  a  payment  of  $500.00  had  been  made  upon 
a  Mortgage  set  forth  as  an  incumbrance.  The  decree,  however, 
followed  the  application  and  the  decree  and  certificate  of  title  set 
forth  a  Mortgage  for  the  full  original  sum  as  a  lien  upon  the  prem- 
ises. It  must  not  be  forgotten  also  that  tax  titles,  if  founded  upon  a 
deed  by  the  State  of  California,  can  be  registered  simply  upon  appli- 
cation without  further  proof.  Merely  to  set  forth  this  fact  is  to 
show  upon  what  an  unsubstantial  foundation  a  registered  title  may 
rest. 

87 


With  respect  to  the  usual  form  of  Deed  of  Trust  now  com- 
monly employed  to  secure  loans,  the  Act  prohibits  a  sale  by  the 
Trustee.  He  must  go  into  Court  and  obtain  authority  by  an  order 
of  Court  to  make  the  sale,  and,  apparently,  when  the  sale  has  been 
made  and  the  trustee's  deed  issued,  if  the  owner's  duplicate  certifi- 
cate is  not  available  the  purchaser  must  again  go  into  Court  and 
make  proof  of  his  rights  in  order  to  procure  the  issuance  of  a 
certificate  showing  title  in  him. 

The  Act  provides  in  reality  a  new  form  of  conveyancing.     It  is 
extremely  technical,  as  appears  from  some  of  the  requirements  set 
forth  herein  and  dififers  in  almost  every  important  particular  from 
the  usual  method  of  transferring  or  incumbering  titles.    It  has  never 
been  judicially  construed.    The  effect  of  failure  to  comply  with  its 
many  requirements  can  only  be  surmised.     Until  it  has  been  con- 
strued by  the  proper  authorities  this  uncertainty  must   continue. 
Matters  which  in  ordinary  conveyancing  would  be  deemed  imma- 
terial are  set  forth  as  requirements,  or  as  things  which  must  be  done 
in  the  same  manner  as  the  most  important  phases  of  the  plan. 
Ultimately,  perhaps  through  a  series  of  judicial  decisions,  it  may 
be  determined  what  is  important  and  what  may  be  ignored.    At  the 
present  time  there   is   no  course  open  but  to  insist  upon   literal 
compliance  with  every  provision  however  burdensome.     It  is  an 
ambitious    plan    going   beyond    the    State    Courts   and   seeking   to 
prescribe  a  course  of  action  even  for  proceedings  in  the  Federal 
Courts  affecting  registered  land.     It  assumes  that  no  other  pro- 
vision of  law  may  be  superior,  whereas  the  fact  remains  that  fran- 
chise taxes  upon  corporations  prescribed  by  the  State  Constitution 
are  a  lien  upon  their  property  regardless  of  the  provisions  of  this 
Act;  that  for  failure  to  pay  such  lien  in  the  manner  prescribed  the 
corporation  will  not  only  forfeit  its  charter,  but  the  lien  will  remain. 
It  also  necessarily  follows  that  the  provisions  of  the  public  utility 
act  governing  the  transactions  of  certain  classes  of  corporations 
will  control  as  to  conveyances  and  incumbrances  by  them  and  that 
these  and  many  other  matters  will  not  and  cannot  be  brought  to  the 
attention  of  the  registrar  who  is  not  even  expected  to  examine  the 
proceedings  taken  in  an  action  in  Court  in  his  own  county.     He 
simply  registers  upon  production  of  the  decree  subject  to  the  right 
proceedings  taken  in  an  action  in  Court  in  his  own  county. 

There  is  a  provision  of  the  Act  that,  alter  registration,  every 
lien  and  encumbrance  on  the  land  shall  be  deemed  to  be  subject  to 
any  subsequent  amendments  or  alterations  of  the  Act,  and  that  any 
one  acquiring  a  lien  shall  be  deemed  to  have  agreed  to  this.  This 
means  that  if  you  take  a  Mortgage  on  land  registered  under  this 
Act,  and  if  it  be  held  to  be  law,  you  are  held  to  have  agreed  that 

88 


your  contract  may  be  altered  by  any  subsequent  amendments  or 
alterations  of  the  Act.  A  rather  startling  innovation,  I  should  say, 
and  one  of  particular  interest  to  one  who  contemplates  loaning 
money  on  the  security  of  land  registered  under  the  Act. 

In  closing  I  will  say  that  liens  in  this  State  may  be  created 
upon  land  by  contract  other  than  Mortgage.  Usually  there  is  no 
personal  obligation,  the  land  alone  being  held.  As  for  example, 
where  contracts  are  entered  into  for  the  furnishing  of  water  for 
irrigation  or  the  like,  it  is  usually  provided  in  the  contract  that  the 
annual  charge  shall  be  a  lien  upon  the  land.  These  liens  may  be 
enforced  against  the  land,  but  it  has  been  held  that  no  owner,  in 
the  absence  of  an  express  personal  agreement  to  pay,  is  personally 
liable. 

I  would  urge  these  points  upon  your  attention.  In  taking  a 
Mortgage,  ascertain  whether  or  not  the  property  be  a  homestead. 
Jf  so,  husband  and  wife  must  join  in  the  note  and  Mortgage.  Make 
the  check  for  the  proceeds  payable  to  both.  Make  inspection  of  the 
premises  and  ascertain  if  any  other  than  the  Mortgagor  is  in  pos- 
session and  claiming  rights.  If  the  property  stands  in  the  husband's 
name  alone,  and  it  be  not  homestead,  it  is  not  necessary  that  the 
wife  join,  for  if  it  be  his  separate  property  she  has  no  interest,  and 
if  it  be  community  property  he  has  the  entire  control  of  it.  If  the 
title  is  acquired  by  the  wife  since  May  19,  1889,  and  the  property 
be  not  homestead,  it  is  not  necessary  that  the  husband  join,  for  it  is 
presumed  to  be  her  separate  property,  and  this  presumption  is  final 
and  conclusive  in  favor  of  an  encumbrancer  or  purchaser  in  good 
faith,  and  for  value.  When  she  has  dealt  with  the  property  the 
gate  is  absolutely  closed.  In  granting  extensions  of  the  original 
obligation  secure  the  consent  of  all  parties  including  subsequent 
encumbrancers.  In  purchasing  a  Mortgage  make  inquiry  of  the 
maker  as  to  any  equities  existing  and  record  your  assignment  and 
in  every  case  have  the  title  examined  that  you  may  know  of  any 
possible  subsequent  claims  or  liens.  When  you  have  done  these 
things  the  law  protects  you  because  you  are  vigilant.  If  you  ignore 
them  the  law  imposes  upon  you  the  penalty  of  your  negligence. 
Remember  that  if  you  take  a  Mortgage  on  land  registered  under 
the  Torrens  Act  you  have  agreed  that  your  contract  may  be  changed 
in  any  particular  at  any  time  it  is  seen  fit  to  amend  or  alter  the  Act. 


89 


VI. 

Homestead  Exemptions 

It  has  always  been  the  policy  of  the  law  to  protect  and  save 
to  the  family  a  place  for  a  home,  and  in  this  State  the  law  is  very 
indulgent  in  this  matter.  In  many  of  the  states  of  the  Union  the 
land  becomes  a  homestead  simply  by  the  fact  that  it  is  occupied 
as  a  home — a  place  of  residence  for  the  family.  Where  such 
law  prevails  a  removal  from  one  residence  to  another  has  the  ef- 
fect to  destroy  the  homestead  character  of  the  property  left  and 
such  character  immediately  attaches  to  the  new  premises  occupied. 
This  is  not  true  in  this  State.  To  impress  real  estate  with  the  char- 
acter of  a  homestead  in  California,  it  is  necessary  to  follow  the  statu- 
tory provisions.  A  Declaration  of  Homestead  must  be  executed 
and  filed  in  the  recorder's  office  before  the  property  becomes  a 
homestead,  and  this  property  remains  the  homestead  of  the  claim- 
ant until  conveyed  or  abandoned  by  an  instrument  of  abandon- 
ment, executed  and  recorded  in  the  recorder's  office  of  the  county 
where  the  original  Declaration  was  filed. 

The  homestead  interest  in  land  is  the  offspring  of  the  Statute 
in  this  State,  and  is  not  an  inherent  right.  This  interest  is  created 
by  Statute  for  the  humane  and  benevolent  purpose  of  furnishing 
a  home  for  the  family,  and  the  law  makes  the  home  a  sanctuary 
for  the  family,  safe  from  attacking  creditors,  and  safe  from  the 
danger  of  a  conveyance  by  one  or  the  other  of  the  spouses  alone. 
The  power  of  a  stranger  to  enter  as  a  tenant  in  common,  to  in- 
terfere with  the  occupancy,  enjoyment  and  control  by  the  home- 
stead claimants,  and  his  power  to  have  the  land  partitioned  or 
sold  if  it  could  not  be  divided,  is  inconsistent  with  the  very  na- 
ture of  a  homestead,  and  is  violative  of  the  very  purpose  for  which 
the  homestead  is  created ;  hence  it  follows  that  no  conveyance  of 
the  homestead  can  be  made  unless  the  deed  is  joined  in  by  both 
husband  and  wife,  if  the  claimant  be  married.  To  hold  that  one 
could  convey  an  interest  to  a  stranger  without  the  consent  of  the 
other  would  undermine  the  very  principle  of  the  protection  of 
the  home. 

The  very  liberal  homestead  exemptions  under  the  California 
laws  have  been  often  the  subject  of  criticism  by  the  unthinking. 
At  first  blush  it  would  appear  somewhat  unjust  to  permit  a  man 

90 


to  sequestrate  from  his  creditors  by  this  means  a  very  consider- 
able amount  of  his  property.  It  is  true  that  in  some  instances 
the  exercise  of  this  exemption  right  works  a  hardship  upon  the 
creditor.  On  the  other  hand,  California  is  a  new,  growing  com- 
munity, the  country  is  rich,  the  per  capita  wealth  is  large,  money 
is  ordinarily  easy,  and  credits  are  correspondingly  extended.  There 
is  a  reason  that  the  homestead  exemption  in  California  should  be 
larger  than  in  other  communities.  It  is  but  one  factor  in  the 
growth,  wealth  and  prosperity  of  the  State.  It  has  been  my  per- 
sonal observation  that  more  liberal  credits  are  given  in  California, 
where  the  exemptions  of  real  and  personal  property  from  execu- 
tion are  large,  than  in  states  allowing  small  exemptions.  In 
some  states  the  exemption  of  a  married  couple  is  but  $300.00, 
with  some  trifling  exemptions  as  to  household  furniture,  etc.  In 
such  communities  credits  are  limited.  The  liberal  exemption  of 
real  and  personal  property  in  California  is  but  another  example 
of  the  liberality  of  her  people  and  her  laws. 

The  Statute  prescribes  the  mode  of  declaring  a  homestead. 
In  order  to  select  a  homestead,  the  h usband  or  other  head  of  the 
family,  or  in  case  the  husband  has  not  made  such  declaration,  the 


wife,  must  execute  and  acknowledge  in  the  same  manner  as  a 
grant  of  real  property  is  acknowledged,  a  Declaration  of  Home- 
stead, and  file  the  same  for  record.  It  will  be  observed  that  one 
of  the  requirements  is  that  it  must  be  acknowledged,  thus  differ- 
ing from  a  deed  which  is  valid  although  not  acknowledged.  A 
declaration  of  homestead  is  only  effective  from  the  date  of  its  re- 
cordation. The  Torrens  Act  does  not  provide  for  the  creation  of 
a  homestead,  but  does  assert  that  after  registration  that  no  in- 
strument recorded  in  the  recorder's  office  shall  be  deemed  to 
impart  notice  of  its  contents.  I  am  unable  to  see  how,  if  the  Tor- 
rens Act  be  law,  how  land  may  be  impressed  with  a  homestead 
after  it  has  been  registered.  The  Declaration  must  contain  a 
statement  showing  that  the  person  making  it  is  the  head  of  a 
family,  and  if  the_x^^i'"'"'=^ot  be  married,  the  name  of  the  spouse, 
or  when  the  Declaration  is  made  by  the  wife,  it  must  show  that 
her  husband  has  not  made  such  declaration,  and  that  she  there- 
fore makes  the  Declaration  for  their  joint  benefit.  A  statement 
that  the  person  making  it  is  residing  on  the  premises  and  claims 
them  as  a  homestead.  It  mii'^^-  a^o  rnntnin  a  r^pgrript-jon  of  the 
premises,  and  an  estimate  of  their  actual  cash  value.     All  of  these 

requirements  are  vital,  and  a  Irlomestead  Declaration  which  does 

— = —  ,        — **■     I  1 1 " — — — — — ^»___i_- __— — — — — — .» 

not  contain  these  statements  is  void.  A  statement  as  to  "cost 
value"  has  been  held  to  be  insufficient.  This  illustrates  the  point 
advanced  that  the   Statute  must  be  strictlv  followed. 

91 


I  It  is_absolutely  essential   that  the_claimant   resi4e-ai£Qn-the 

I  premises  at  the  time  the  DeclaratiojoLis  made.  The  description  of 
j  the  premises  must  be  sufficient  to  identify  the  very  property 
I  claimed. 

Both  in  the  Constitution  and  the  Statutes  the  word  "Home- 
stead" is  used  in  its  popular  sense,  and  as  the  Statutes  are  reme- 
dial they  should  be  liberally  construed,  but  being  a  creature  of  the 
Statutes,  the  Statute  must  be  strictly  followed  in  the  matter  of 
the  Declaration. 

The  homestead  consists  of  the  dwelling  house  in  which  the 
claimant  resides,  and  the  land  on  which  it  is  situated,  selected  in 
the  statutory  method. 

The  homestead  is  not  limited  by  the  law,  except  as  to  value 
of  the  exemption.  Thus,  a  homestead  may  be  declared  upon  land 
of  any  value,  and  of  any  extent,  so  long  as  the  premises  are  used 
for  residential  purposes.  If  the  premises  claimed  in  addition  to 
being  lived  upon  are  also  used  as  a  place  of  business  by  the  fam- 
ily, and  this  frequently  happens,  they  do  not  therefore  necessarily 
cease  to  be  homestead  property.  Thus,  where  the  house  is  par- 
titioned and  one  half  was  used  for  a  millinery  store,  conducted 
by  the  wife,  and  also  for  living  purposes  of  the  family,  and  the 
other  half  was  occupied  as  a  tinshop,  conducted  by  the  husband, 
it  was  held  that  the  property  did  not  lose  its  homestead  charac- 
ter. Where  a  building  was  enlarged  after  the  Declaration  was 
filed  and  used  as  a  hotel,  and  the  claimant  continued  to  reside 
on  the  premises,  it  was  held  they  did  not  lose  their  homestead 
character.  It  must  be  remembered,  however,  that  the  hotel  busi- 
ness must  be  incidental  to  the  primary  use,  that  is  to  say,  to  the 
use  as  a  residence.  Where  a  building  had  been  used  for  business 
purposes  for  many  years  before  the  Declaration  was  filed,  and 
the  business  was  discontinued  after  the  filing  and  the  building 
thereafter  used  as  a  dwelling,  it  was  held  that  premises  remained 
a  homestead.  Where  one  is  the  owner  of  a  flat  building  and 
lives  in  one  of  the  flats,  he  may  declare  a  homestead  on  the  whole 
building  and  the  land,  even  where  there  are  separate  entrances 
to  the  building,  provided  his  residence  there  be  in  good  faith, 
solely  for  the  purposes  of  a  home,  and  not  incidental  to  the  busi- 
ness of  conducting  an  apartment  house.  Roomers  and  lodgers 
may  be  taken,  and  yet  if  the  claimant  resides  on  the  premises  they 
remain  a  homestead.  An  occupancy  by  a  tenant,  however,  is  not 
sufficient.  The  residence  must  be  bona  fide  and  the  main  purpose 
to  which  the  property  is  devoted.  Where  the  premises  are  occu- 
pied  by  two  families,  the  homestead  can  only  apply  to  one.  The 
claimant  may  lease  a  portion  of  the  building  and  yet  retain  his 

92 


homestead.  A  second  building  may  be  erected  on  the  premises 
lifter  the  Declaration  and  used  for  other  purposes,  yet  if  the 
claimant  continue  to  reside  on  the  premises  it  is  still  a  home- 
stead. The  test  would  seem  to  be  whether  the  business  is  inci- 
dental to  the  residence,  or  the  residence  is  merely  incidental  to  the 
business.  In  the  former  case,  the  main  purpose  being  for  a  resi- 
dence, there  is  no  question  but  that  the  homestead  would  be 
valid.  However,  if  the  main  purpose  be  to  conduct  a  business  of 
any  kind  on  the  place,  and  the  residence  be  merely  incidental 
thereto,  the  homestead  character  would  cease. 

The  right  of  homestead  is  not  confined  to  any  particular. 
title  or  interest!  Any  equitable  interest  of  the  claimant  may  be 
so  impressed,  as  where  one  holds  a  contract  lor  purchase,  or  a 
lease  oi  the  property,  his  Homestead  Declaration  would  attach 
to  such  interest  to  the  extent  that  his  interest  would  be  protect- 
ed as  against  creditors.  A  garden  attached  to  the  land  may  be 
included  in  Homesead  Declaration.  More  than  one  lot  may  be 
selected  where  they  are  all  used  legitimately  and  bona  fide  for 
living  purposes.  Where  part  of  the  land  described  in  the  Home- 
stead Declaration  is  actually  used  and  appropriated  as  a  home 
for  the  family,  the  remainder  not  so  used  and  appropriated,  forms 
no  part  of  the  homestead. 

The  physical  fact  of  claimant's  occupancy  as  well  as  the  in- 
tention with  which  he  occupies,  are  to  be  taken  into  considera- 
tion. It  is  as  I  have  stated,  the  principal  use  to  which  the  prop- 
erty is  put,  and  not  the  quantity  which  governs.  A  homestead 
may  be  filed  on  a  mining  location.  Where  the  Homestead  Dec- 
laration covers  the  whole  of  the  farm  and  the  major  portion  of 
the  farm  was  used  for  stock  grazing,  the  fact  that  the  farmer  took 
in  other  stock  to  pasture  for  a  consideration  was  held  not  to  de- 
stroy the  homestead.  When  the  homestead  comes  to  be  set  apart 
under  the  statutory  proceedings  which  I  shall  recite  later,  then 
it  is  limited  in  quantity  to  the  actual  dwelling  house,  necessary 
outbuildings  and  a  sufficient  amount  only  of  the  land  necessary 
for  the  claimant  for  living  purposes.  But  this  must  not  be  con- 
founded with  the  right  to  occupy  any  amount  of  property  as  a 
homestead  primarily. 

Homesteads  may  be  selected  and  claimed  of  not  exceeding 
$5,000.00  in  value  by  any  head  of  a  family,  and  of  not  exceeding 
$1,000.00  in  value  by  any  other  person.  Here  again  must  be  dis- 
tinguished that  these  values  mean  the  exemption  value  if  the 
homestead  be  attacked,  and  not  the  value  of  the  property  pri- 
marily. There  is  no  limit  to  the  value  on  property  which  may 
be  made  a  homestead.     The  limit  is  only  upon  the  exemption. 

93 


The  phrase,  "head  of  a  family,"  is  defined  by  the  Statute  to 
include  within  its  meaning — 

1.  The  husband,   when  the  claimant  is  a  married  person. 

2.  Every  person  who  has  residing  on  the  premises  with 
him  or  her,  and  under  his  or  her  care  and  maintenance,  either  his 
or  her  minor  child  or  minor  grandchild  or  the  minor  child  of  his 
or  her  deceased  wife  or  husband,  a  minor  brother  or  sister,  or 
the  minor  child  of  a  deceased  brother  or  sister,  a  father,  mother, 
grandfather  or  grandmother,  the  father,  mother,  grandfather  or 
grandmother  of  a  deceased  wife  or  husband,  an  unmarried  sister  or 
any  other  relatives  who  have  attained  the  age  of  majority  and  are 
unable  to  take  care  of  or  support  themselves. 

A  homestead  cannot  be  carved  out  of  property  held  in  joint  ten- 
ancy,  or  tenancy  in  common,  unless  the  jomt  tenancy  or  tenancy 
in   common   be   between   husband   and   wife.     \Vhile"the   law   for- 


bids  the  carving  out  of  the  homestead  on  an  undivided  interest  in 
the  land  for  obvious  reasons,  for  where  there  are  two  tenants  in 
common  on  the  land,  each  has  the  right  of  occupancy,  yet  the  rea- 
son for  this  rule  ceases  when  applied  to  joint  tenants,  or  tenants 
in  common,  who  are  husband  and  wife,  as  though  each  owns  a 
half  of  the  home,  their  Declaration  of  Homestead  is  but  a  protec- 
tion for  that  very  home.  Land  held  in  such  tenancy  can  be  cre- 
ated a  homestead  by  the  declaration  of  the  husband  and  wife, 
or  the  wife  alone,  but  not  by  the  husband  alone. 

If  the  claimant  b€  marTi-e-d^— the^  homestead  may  be  selected 
frorri_the  community  propertv.  or  the  separate  property  of  the 
husband^  or  with  the  consent  of  the  wife,  from  her  separate  prop- 
erty. Thus  it  will  be  seen  that  a  Declaration  of  Homestead  made 
by  the  husband  upon  his  wife's  separate  property  without  her 
joining  in  the  declaration  is  void.  The  wife,  however,  may  de- 
clare a  homestead  on  her  own  separate  property  for  the  benefit  of 
herself  and  husband,  upon  the  community  property,  or  upon  her 
husband's  separate  property  without  the  husband  joining  in  the 
Declaration,  and  may  be  declared  on  property  which  is  both  com- 
munity or  separate,  but  without  her  consent  the  husband  cannot 
create  a  homestead  on  the  separate  property  of  the  wife. 

The  homestead  is  exempt  from  execution  or  forced  sale  ex- 
cept  m  cases  where  a  judgment  was  obtained  before  the  Declara- 
tion of  Hnmp<^f^^d  was  filed  for  record,  and  which  constituted  a  lien 


ttpon  the  premises  at  the  time  the  Declaration  was  made^and  except 
on  debts  secured  by  mechanics,  contractors,  sub-contractors,  ar- 
tisans, architects,  builders,  laborers  of  every  class,  material  men 
or  vendors  liens  upon  the  premises,  and  except  debts  secured  by 
Mortgages  or  Trust  Deeds  upon  the  premises,  executed  and  ac- 

94 


knowledged  by  the  husband  and  wife,  and  secured  by  Mortgages 
or  Trust  Deeds  on  the  premises,  executed  and  recorded  before  the 
Declaration  of  Homestead  was  filed  for  record. /in  any  other  case 
where  an  execution  has  been  issued  for  the  enforcement  of  a  judg- 
ment and  the  execution  is  levied  upon  the  homestead,  the  judg- 
ment creditor  may  at  any  time  within  60  days  thereafter  apply  to 
the  Superior  Court  of  the  county  in  which  the  homestead  is  sit- 
uated for  the  appointment  of  persons  to  appraise  the  value  there- 
of, and  if  such  application  shall  not  be  made  within  60  days  after 
the  levy  of  such  execution,  the  lien  of  the  execution  ceases  at  the 
expiration  of  such  period,  and  no  execution  based  upon  the  same 
judgment  can  be  thereafter  levied  upon  the  homestead.  The  ap- 
plication made  to  the  Court  must  be  verified  and  show  the  fact 
that  an  execution  has  been  levied  upon  the  homestead  within  60 
days  prior  to  the  filing  of  said  petition  ;  must  contain  a  descrip- 
tion of  the  homestead  and  the  name  of  the  claimant ;  a  statement 
that  the  value  of  the  homestead  exceeds  the  amount  of  the  home- 
stead exemption,  and  that  no  previous  execution  arising  out  of  the 
same  judgment  has  been  levied  upon  said  homestead.  Within 
90  days  from  the  date  of  filing  the  petition  a  copy  thereof  with  a 
notice  of  the  time  and  place  of  hearing  must  be  served  upon  the 
claimant  or  his  attorney,  at  least  two  days  before  the  hearing, 
and  if  such  notice  shall  not  be  so  served  the  lien  of  execution 
ceases  at  the  expiration  of  said  period  of  90  days,  and  no  execution 
based  upon  the  same  judgment  can  be  thereafter  levied  upon  the 
homestead.  At  the  hearing  the  Judge  may  upon  proof  of  the 
service  of  the  copy  of  the  petition  and  notice  and  of  the  facts  stat- 
ed in  the  petition  appoint  three  disinterested  residents  of  the 
county  to  appraise  the  value  of  the  homestead.  These  persons 
are  sworn ;  they  are  required  to  view  the  premises  and  appraise 
the  value  thereof,  and,  if  the  appraised  value  exceeds  the  home- 
stead exemption,  they  must  determine  whether  the  land  claimed 
can  be  divided  without  material  injury.  They  must  make  their 
report  within  15  days  after  their  appointment,  to  the  Judge — a  re- 
port in  writing  which  must  show  the  appraised  value  and  their 
determination  upon  the  matter  of  a  division  of  the  land  claimed. 
If,  from  the  report  it  appears  that  the  land  claimed  can  be  divided 
without  material  injury,  the  Court  will  by  order  direct  the  ap- 
praisers to  set  off  to  the  claimant  so  much  land,  including  the 
residence,  as  will  amount  in  value  to  the  homestead  exemption, 
and  the  execution  can  then  be  enforced  against  the  remainder  of 
the  land.  If,  however,  it  appears  to  the  Judge  from  the  report 
that  the  land  claimed  exceeds  in  value  the  amount  of  the  homestead 
exemption,  and  that  it  cannot  be  divided,  he  will  make  an  order 

95 


directing  the  sale  of  the  whole  property  under  the  execution,  and 
at  such  sale  no  bid  must  be  received  unless  it  exceeds  the  amount 
of  the  homestead  exemption.  If  the  sale  is  made,  the  proceeds 
thereof  to  the  amount  of  the  homestead  exemption  must  be  paid  to 
the  claimant  and  the  balance  applied  to  the  satisfaction  of  the  exe- 
cution. The  money  paid  to  the  claimant  is  entitled  for  the  period 
of  six  months  thereafter  to  the  same  protection  against  legal  pro- 
cess and  the  voluntary  disposition  of  the  husband  which  the  law 
gives  to  the  homestead.  In  other  words,  for  six  months  the  cash 
received  by  the  claimant  is  protected  as  was  the  land  before  the 
sale.  If  there  be  a  mortgage  on  the  property  at  the  time  of  the 
execution  sale,  this  mortgage  must  first  be  paid  before  the  claim- 
ant is  paid.  Thus,  if  the  homestead  covers  property  worth  $15,000, 
there  be  a  mortgage  on  the  premises  for  $5,000,  and  an  execution 
creditor  proceeds  against  the  property  and  has  it  sold,  the  mort- 
gagee is  first  paid,  the  next  $5,000  is  paid  to  the  claimant,  and 
the  remaining  $5,000  subjected  to  the  claims  of  the  execution 
creditor. 

A  homestead  where  the  husband  or  wife  is  insane  may  be 
sold  or  mortgaged  under  certain  Statutory  proceedings  not  nec- 
essary to  recite  here. 

A  Declaration  of  Homestead  prevails  over  an  attachment 
levied  before  the  Declaration  was  filed  where  the  judgment  was 
not  entered  until  afterthe  Declaration  was  filed.  Under  the  Stat- 
ute all  Mortgages  or  Trust  Deeds  executed  by  the  husband  and 
wife  in  proper  form  take  precedence  over  the  Declaration,  but  a 
vendor's  lien  takes  precedence  only  if  the  rights  of  third  parties 
do  not  intervene.  A  mortgage  given  by  the  husband  alone  to  se- 
cure purchase  money  is  defeated  by  a  Declaration  of  Homestead 
recorded  before  the  mortgage  is  recorded. 

The  homestead  of  a  married  person  cannot  be  conveyed  or  en- 
cumbered unless  the  instrument  by  which  it  is  conveyed  and  en- 
cumbered is  executed  and  acknowledged  by  both  husband  and 
Avife.  Observe  that  I  have  stated  it  must  be  acknowledged  by 
both  husband  and  wife.  The  conveyance  must  be  by  one  instru- 
ment and  must  be  the  personal  act  of  the  parties.  It  is  not  nec- 
essary that  the  instrument  be  signed  at  the  same  time  by  both 
husband  and  wife,  or  acknowledged  at  the  same  time,  but  both 
must  join  in  the  one  instrument  and  both  acknowledge. 

A  conveyance  or  a  mortgage  of  the  homestead  cannot  be  exe- 
cuted by  an  Attorney  in  Fact.  It  must  be  the  personal  act  of 
the  party.  The  doctrine  of  caveat  emptor  applies  to  those  dealing 
with  a  homestead.  That  is  to  say,  the  purchaser  must  beware, 
and  the  question  as  to  whether  the  property  is  homestead  or  not 

96 


is  a  matter  of  fact,  and  I  emphasize  here  again  the  necessity  of 
having  the  title  examined  before  purchasing  or  loaning  money  on 
any  property.  It  might  not  occur  to  one  loaning  money  upon  a 
hotel  or  a  flat  building  that  the  same  might  be  homestead,  and  if 
he  be  dealing,  we  will  say,  with  the  husband  and  takes  his  mort- 
gage without  the  wife  joining,  the  wife  has  the  full  legal  right  to 
repudiate  the  transaction  and  avoid  the  mortgage.  When  it  is 
found  that  the  property  is  homestead,  it  is  not  necessary  in  taking 
a  mortgage  to  require  an  abandonment  of  the  homestead.  Let  both 
husband  and  wife  join  in  the  mortgage  and  the  note  and  pay  the 
proceeds  to  both.  You  are  then  as  fully  protected  as  if  the  home- 
stead had  been  abandoned,  and  many  times  it  works  a  hardship 
to  the  borrowers  to  require  them  to  abandon  their  declared  home- 
stead. 

It  is  not  necessary  that  the  second  wife  of  a  claimant  join  in 
any  deed  or  mortgage.  The  homestead  does  not  inure  to  the  bene- 
fit of  the  wife  other  than  the  one  who  was  the  wife  at  the  time 
of  the  Declaration,  and  if  it  is  desired  that  she  do  have  such  bene- 
fit, a  new  Declaration  must  be  filed. 

Under  foreclosure  of  any  mortgage  made  by  the  husband 
alone  before  the  homestead  was  declared,  the  wife  must  be  made 
a  party,  or  the  decree  will  be  void  as  to  her.  A  homestead  can 
be  abandoned  only  by  a  Declaration  of  Abandonment  or  a  grant 
thereof,  executed  and  acknowledged  by  the  husband  and  wife,  if 
the  claimant  is  married ,  and  by  the  claimant  if  unmarried.  Thus 
the  removal  from  the  premises  does  not  work  an  abandonment 
of  the  homestead.  It  continues  its  homestead  character  so  long 
as  it  be  not  legally  abandoned  in  the  manner  prescribed.  How- 
ever, it  has  been  held  that  where  the  husband  deserted  the  wife 
and  she  made  a  deed  alone  of  homestead  property  and  the  pur- 
chaser entered  and  occupied  the  premises  for  the  prescribed  time, 
he  acquired  title  against  the  husband  by  adverse  possession.  The 
homestead  may  likewise  be  destroyed  by  divorce. 

In  case  of  divorce,  if  the  homestead  has  been  selected  from 
community  property,  it  may  be  assigned  by  the  Court  to  the  in- 
nocent party  either  absolutely,  or  for  a  limited  period,  subject 
in  the  latter  case  to  the  future  disposition  of  the  Court,  or  it  may 
in  the  discretion  of  the  Court  be  divided,  or  be  sold,  and  the  pro- 
ceeds divided,  and  thereafter  the  property  loses  its  homestead 
character.  If  a  homestead  has  been  selected  from  the  separate 
property  of  either,  then  the  Court  upon  divorce  may  assign  it  to 
the  former  owner  of  such  property,  subject  to  the  power  of  the 
Court  to  assign  it  for  a  limited  period  to  the  innocent  party.  This 
limited  period  cannot  extend  beyond  the  life  of  the  party.     We 

97 


will  take  an  instance  of  where  the  homestead  was  selected  from 
the  separate  property  of  the  husband.  By  the  decree  the  Court 
will  assign  it  to  him  as  his  property  and  may  assign  it  to  the  wife, 
if  she  be  the  innocent  party,  for  a  limited  period,  and  at  the  ex- 
piration of  that  period  the  property  loses  its  homestead  character. 
It  has  been  held  that  if  the  wife  in  the  case  used  as  illustration 
fails  to  assert  her  right  to  have  it  assigned  to  her  for  a  limited 
period  that  after  the  time  for  an  appeal  has  passed  she  loses  that 
right,  and  of  course,  when  the  right  is  lost  the  property  has 
ceased  to  be  a  homestead. 

If  the  selection  is  made  by  a  married  person  from  the  com- 
munity property,  or  from  the  separate  property  of  the  spouse 
making  the  selection,  or  joining  therein,  the  land  so  selected  on 
the  death  of  either  of  the  spouses  vests  in  the  survivor.  In  other 
cases,  upon  the  death  of  the  person  whose  property  was  selected 
as  a  homestead,  it  goes  to  the  heirs  or  devisees,  subject  to  the 
power  of  the  Superior  Court  to  assign  the  same  for  a  limited  pe- 
riod to  the  family  of  the  decendent,  but  in  no  case  is  it,  or  the 
proceeds,  rents,  issues  or  profits  thereof  held  liable  for  the  debts 
of  the  owner  except  as  above  stated,  and  should  the  homestead 
be  sold  by  the  owner,  the  proceeds  arising  from  such  sale  to  the 
extent  of  the  value  allowed  for  a  homestead  exemption  are  ex- 
empted to  the  owner  of  the  homestead  for  a  period  of  six  months 
next  following  such  sale. 

Upon  the  death  of  either  spouse  and  an  administration  be 
had,  then,  upon  the  return  of  the  inventory  of  the  estate,  or  at  any 
subsequent  time  during  the  administration,  the  Court  may,  on 
petition  therefor,  set  apart  for  the  use  of  the  surviving  husband 
or  wife,  or  in  case  of  his  or  her  death,  to  the  minor  children  of 
the  decedent,  all  the  property  exempt  from  execution,  including 
the  homestead  selected,  designated  and  recorded,  provided  such 
homestead  was  selected  from  the  common  property  or  from  the 
separate  property  of  the  persons  selecting  or  joining  in  the  selec- 
tion of  the  same. 

It  must  be  remembered  that  under  the  circumstances  above 
recited,  that  upon  the  death  of  one  spouse,  the  property  vests  ab- 
solutely in  the  other  without  administration,  but  the  Probate  Court 
has  jurisdiction  to  entertain  a  petition  to  have  the  same  set  aside. 
This  is  not  an  administration  of  the  homestead  property,  but  is 
merely  an  order  taking  the  same  out  of  the  administration  and 
finding  that  it  is  not  subject  to  administration.  This  is  a  proper 
and  safe  course  as  the  Court  is  thereby  given  jurisdiction  to  pass 
upon  the  homestead  and  judicially  determine  its  validity.  Sec- 
tion 1723  of  the  Code  of  Civil  Procedure  provides  that  if  any  per- 

98 


son  has  died  who  at  the  time  of  his  death  was  one  of  the  spouses 
owning  land  as  a  homestead,  which  lands  by  reason  of  the  death 
of  such  person  vested  in  the  surviving  spouse,  any  one  interested 
in  the  property  or  in  the  title  thereto,  may  file  in  the  Superior 
Court  his  verified  petition  setting  forth  such  facts,  and  thereupon 
and  after  notice  by  publication  or  otherwise  as  the  Court  may 
order,  the  Court  may  take  evidence,  and  if  upon  such  hearing  it 
shall  appear  that  such  homestead  vest  in  the  survivor,  the  Court 
shall  make  a  decree  to  that  effect  and  thereupon  a  certified  copy 
of  such  decree  may  be  recorded  in  the  office  of  the  county  re- 
corder. 

The  whole  effect  of  this  procedure  is  merely  to  establish  of 
record  the  fact  of  the  death  of  the  deceased  spouse.  It  does  not 
purport  to  give  the  Court  jurisdiction  to  determine  the  validity 
of  the  homestead.  As  we  have  seen,  the  Homestead  Declaration 
may  be  invalid  for  a  number  of  reasons,  and  the  fact  of  its  valid- 
ity would  not  be  judicially  established;  therefore,  the  course  first 
suggested,  that  is  to  say,  a  petition  in  the  probate  proceeding  is 
preferable,  as  it  is  then  determined  for  all  time  if  the  homestead 
be  set  aside,  that  the  same  was  valid. 

When  a  person  dies,  leaving  a  widow  or  minor  children,  the 
widow  or  children,  until  letters  are  granted  and  the  inventory  is 
returned,  are  entitled  to  remain  in  possession  of  the  homestead. 
The  status  of  the  property  at  the  time  the  Homestead  Declara- 
tion is  made  determines  the  question  of  succession.  The  home- 
stead is  not  subject  to  the  payment  of  any  debt  or  liability  con- 
tracted by  or  existing  against  the  husband  and  wife,  or  either  of 
them  previous  to,  or  at  the  time  of  the  death  of  such  husband  or 
wife,  except  as  provided  in  the  Civil  Code.  This  clause  "except 
as  provided  in  the  Civil  Code,"  has  been  construed  as  not  show- 
ing an  intention  to  allow  general  creditors  to  reach  the  excess  in 
value  of  over  $5,000.  The  Court  of  Appeals  has  said  this  section 
must  be  construed  in  connection  with  other  sections  of  the  Code. 

A  homestead  selected  from  community  property^  or  from  sep- 
arate property  of  spouse  making  or  joining  in  the  selection,  vests 
absolutelv  in  the  survivor,  whether  the  value  thereof  be  m  excess 
of  $5,000  or  not,  and  is  not  liable  for  the  debts  of  the  estate  of 
the  deceased  spouse,  although  such  estate  may  be  otherwise  in- 
solvent, and  the  fact  that  the  excess  in  value  of  over  $5,000  might 
have  been  reached  during  the  lifetime  of  the  deceased  by  appro- 
priate proceedings,  and  that  the  creditors  are  thus  placed  in  a 
worse  position  by  the  death,  cannot  change  the  Statute.  The  cred- 
itor is  presumed  to  know  the  law  and  its  provisions  in  relation 
to  homestead,  and  with   debts  contracted   with  reference  thereto, 

99 


and  to  the  right  of  the  survivor  to  take  the  homestead  free  from 
such  debts.  This  does  not  apply  of  course  to  any  debt  secured 
by  a  Trust  Deed  or  Mortgage  in  the  lifetime  of  the  deceased 
spouse. 

When  no  homestead  has  been  selected,  designated  and  re- 
corded, or  in  cases  where  the  homestead  was  selected  by  the  sur- 
vivor out  of  the  separate  property  of  the  decedent,  the  decedent 
not  having  joined  therein,  the  Court  upon  administration  must 
select,  designate  and  set  apart  and  cause  to  be  recorded  a  home- 
stead for  the  use  of  the  surviving  husband  or  wife,  and  the 
minor  children,  or  if  there  be  no  surviving  husband  or  wife,  then 
for  the  use  of  the  minor  children  out  of  the  common  property,  or 
if  there  be  no  common  property,  then  out  of  the  real  estate  be- 
longing to  the  decedent. 

When  property  is  thus  set  apart  to  the  use  of  the  family,  such 
property,  if  the  decedent  left  a  surviving  spouse,  and  no  minor  child, 
is  the  property  of  such  spouse.  If  the  decedent  left  also  a  minor 
child  or  children,  one-half  of  such  property  belongs  to  the  surviv- 
ing spouse,  and  the  remainder  to  the  child,  or  in  equal  shares  to 
the  children,  if  there  are  more  than  one.  If  there  is  no  surviv- 
ing spouse  the  whole  belongs  to  the  minor  child  or  children.  If 
the  property  set  apar^  is  a  hornestead_  selected  from  the  separate 
property  of  the  decedent  the  Court  can  set  it  apart  .onlyLiQiua  lirn- 
ited  period  to  be_designatecHnjthe_,ordpr  aTij_subiect  to  such  home- 
stead right  the  property  remains  subject  to  administration. 

Prior  to  1873  the  property  under  such  circumstances  vested  only 
in  the  widow  or  minor  children.  The  Code  was  amended  in  1873  in- 
serting the  words  "or  surviving  husband."  If  the  homestead 
which  was  selected  and  recorded  in  the  life  time  of  the  deceased 
be  returned  in  the  inventory  of  his  estate  appraised  at  more  than 
$5,000,  the  Code  directs  that  the  appraisers  must,  before  they 
make  their  return,  ascertain  and  appraise  the  value  of  the  home- 
stead at  the  time  the  same  was  selected,  and  if  such  value  exceed 
$5,000,  the  appraisers  must  determine  whether  the  premises  can 
be  divided  without  material  injury,  and  if  they  find  that  they  can 
be  thus  divided,  they  must  set  apart  to  the  parties  entitled  there- 
to such  portion  of  the  premises  including  the  dwelling  house,  as 
will  amount  in  value  to  the  sum  of  $5,000,  and  make  report  there- 
of to  the  Court.  If  they  find  the  premises  cannot  be  divided 
without  material  injury,  they  must  so  report  and  thereafter  the 
Court  may  make  an  order  for  the  sale  of  the  premises,  and  a  dis- 
position of  the  proceeds  to  the  parties  entitled  thereto. 

It  is  not  essential  in  setting  apart  a  probate  homestead,  that 
is  to  say,  one  set  apart  by  the  Court  where  none  was  declared  in 

100 


the  lifetime  of  the  deceased,  that  there  be  a  dwelling  on  the  prem- 
ises, and  such  a  homestead  cannot  be  set  aside  when  one  was 
declared  in  the  lifetime  of  the  deceased.  The  probate  homestead 
cannot  be  carved  out  of  any  land  which  could  not  have  been 
impressed  with  a  homestead  during  the  lifetime  of  the  deceased, 
but  the  character  of  the  property  at  the  time  of  setting  apart  the 
homestead  is  not  essential.  Money  cannot  be  set  apart  out  of  the 
estate  in  lieu  thereof.  When  the  homestead  is  set  apart  for  the 
use  of  the  widow  and  minor  children  or  to  the  minor  children, 
each  minor  is  entitled  to  possession  until  reaching  majority.  Thus, 
if  the  widow  convey  her  interest  before  the  minor  child  attains 
majority,  the  minor  is  entitled  to  the  possession  as  against  her 
grantee. 

It  is  mandatory  upon  the  Court  upon  petition  to  set  apart 
a  probate  homestead,  and  this  is  the  right  of  which  the  widow 
cannot  be  deprived,  and  her  deed  to  all  her  interest  in  the  estate 
made  after  the  death  of  her  husband,  does  not  convey  her  home- 
stead right,  and  she  can  after  her  deed  proceed  to  have  the  prop- 
erty set  apart  to  her  as  a  homestead,  and  this  setting  apart  takes 
precedence  over  her  deed. 

This  right  to  probate  homestead  cannot  be  affected  by  the 
will  of  a  decedent.  It  has  been  held  that  any  homestead  right 
may  be  terminated  by  separation  agreement.  In  case  of  the  dis- 
solution of  the  marriage  by  decree  of  divorce,  the  homestead,  if 
it  has  been  selected  from  the  community  property,  may  be  as- 
signed to  the  innocent  party  either  absolutely  or  for  a  limited  pe- 
riod, subject  in  the  latter  case  to  the  future  disposition  of  the 
Court,  or  it  may  in  the  discretion  of  the  Court  be  divided  or  be 
sold  and  the  proceeds  divided.  If  the  homestead  has  been  select- 
ed from  the  separate  property  of  either,  it  is  assigned  to  the 
former  owner  of  such  property  subject  to  the  power  of  the  Court 
to  assign  it  for  a  limited  period  to  the  innocent  party.  It  has  been 
held  that  unless  the  innocent  party  assert  this  right  before  judg- 
ment, then  after  the  judgment  becomes  final  he  or  she  is  barred 
from  asserting  any  homestead  right.  If  there  be  no  adjudication 
of  homestead  rights,  the  property  continues  to  be  the  homestead 
of  the  spouses. 

I  will  touch  again  upon  the  point  that  it  is  not  the  value^ 
butjtlie  cjiaracter  of  the  property  dealt  with  that  governs  when. 
the  homesteacHs_set  apart  by  the  Probate  Court,  for  it  is  a  very 
important  one  as  you  shall  see.  As  I  have  stated7when  the  in- 
ventory filed  in  the  estate  shows  that  the  homestead  selected  be- 
fore the  death  of  the  deceased  exceeds  in  value  the  sum  of  $5,000, 
the  appraisers   must  determine  whether  the  premises  can   be   di- 

101 


vided  without  material  injury,  and  if  they  find  they  can  be  thus 
divided,  they  must  set  apart  to  the  parties  entitled  thereto  such 
portion  of  the  premises  including  the  dwelling  house,  as  will 
amount  in  value  to  $5,000,  and  make  report  to  the  Court.  If  they 
find  the  premises  cannot  be  divided  without  material  injury  they 
must  so  report  and  the  Court  will  order  a  sale,  pay  to  the  owner 
$5,000,  and  the  residue  is  the  property  of  the  estate,  subject  to 
the  claims  of  creditors.  But  if  these  proceedings  be  not  taken  and 
the  whole  of  the  homestead  be  set  apart  and  no  appeal  be  taken 
within  60  days  from  the  date  of  entry  of  the  order,  the  judgment 
is  final  and  thereafter  the  property  is  not  liable  for  the  claims  of 
general  creditors  no  matter  what  the  value  may  be.  It  thus  be- 
hooves one  who  is  extending  credit  to  ascertain  the  value  of  the 
homestead  when  his  debtor  dies  and  if  it  be  in  excess  of  $5,000  in 
value,  to  see  to  it  that  the  steps  are  taken  in  the  Probate  Court 
to  secure  that  excess  for  the  creditors.  We  will  take  a  case  like 
this.  Your  customer  owns  a  fine  residence  worth  say  $50,000. 
It  is  subject  to  homestead.  You  know  of  this,  but  you  consider 
the  excess  available  to  you  if  you  are  obliged  to  sue.  The  owner 
dies  and  probate  is  had  of  his  estate.  During  the  course  of  the 
administration  a  petition  is  filed  to  set  apart  the  property  as  a 
homestead.  If  this  is  not  resisted  by  you  the  Court  will  order 
it  so  set  apart,  and  the  order  is  final  in  60  days.  Thereafter  the 
property  is  no  longer  subject  to  the  control  of  the  Probate  Court. 
The  Court  has  lost  jurisdiction  of  it.  It  is  not  a  part  of  the  estate 
at  all  and  is  not  liable  for  debts  of  the  estate.  Your  remedy  is  to 
see  to  it  that  the  appraisers  act  as  directed  by  the  statute.  You 
can  always  do  this  upon  representation  to  the  Court,  who  will 
compel  the  appraisers  to  act.  This  means  that  you  must  be  vigi- 
lant when  your  debtor's  estate  is  probated  to  see  that  the  Court 
takes  such  action  as  regards  the  homestead  which  was  declared 
before  death,  or,  if  the  petition  for  setting  apart  of  a  probate 
homestead  is  filed,  to  see  to  it  that  property  of  excessive  value 
is  not  set  apart  to  the  detriment  of  the  general  creditors.  If  you 
do  not  do  this  you  cannot  pursue  the  property,  even  though  the 
estate  be  insolvent. 

If  your  mortgage  be  upon  property  declared  a  homestead 
either  before  or  after  the  execution  of  the  mortgage  and  the  mort- 
gagor dies,  you  must  present  the  claim  in  his  estate  or  your  right 
of  foreclosure  is  lost.  This  is  for  the  reason  that  other  property 
of  the  estate  must  be  exhausted  in  the  payment  of  debts  before 
recourse  be  had  to  the  homestead  property. 

I  urge  these  points  upon  you  in  closing.  If  you  desire  to  file 
a  homestead  remember  that  the  statutory  requirements  are  abso- 

102 


lutely  necessary  to  a  valid  homestead.  Remember  that  residence 
is  necessary.  Remember  that  the  homestead  can  only  be  aban- 
doned by  Declaration  of  Abandonment  recorded,  or  by  deed  from 
husband  and  wife  by  the  same  deed  and  as  their  personal  act.  It 
cannot  be  done  by  attorney  in  fact.  Removal  from  the  property 
does  not  work  an  abandonment  and  if  you  move  and  do  not  aban- 
don your  first  homestead  by  abandonment  or  deed,  you  cannot  file 
a  second  declaration  which  will  be  valid.  Remember  that  a  hus- 
band cannot  declare  a  homestead  on  his  wife's  separate  property 
without  her  consent,  but  that  the  wife  can  declare  upon  her  hus- 
band's separate  property,  her  own  separate  property  or  the  com- 
munity property,  without  her  husband's  consent.  Do  not  in  cases 
where  the  property  stands  in  the  name  of  the  wife,  and  she  be 
deserted  by  her  husband,  allow  her  to  file  a  homestead.  She  by 
thus  doing  gives  her  husband  a  right  in  the  property  which  he 
did  not  have  before,  and  his  signature  is  required  to  any  deed, 
mortgage  or  abandonment  made  thereafter.  In  loaning  on  home- 
stead property  do  not  require  an  abandonment,  but  see  to  it  that 
your  note  and  mortgage  are  executed  by  husband  and  wife  and 
that  you  pay  the  proceeds  to  both.  Always  make  investigation 
as  to  possession  no  matter  what  the  character  of  the  property  may 
be.  Do  not  take  any  mortgages  or  trust  deeds  without  examina- 
tions of  the  title.  Keep  a  watch  on  subsequent  dealings  with 
the  property.  If  a  homestead  be  declared  after  or  before  your 
mortgage,  see  to  it,  upon  death  of  your  mortgagor,  that  your 
claim  is  presented  to  the  administrator.  Remember  that  even  if 
you  require  an  abandonment  of  the  homestead  at  the  time  you 
make  your  loan,  a  homestead  subsequently  declared,  places  you  ex- 
actly in  the  same  position  as  to  necessity  of  presenting  your 
claims.  If  it  be  homestead  upon  death  of  the  owner  you  must 
file  your  claim  or  you  cannot  maintain  foreclosure.  Remember 
that  if  your  title  be  registered  under  the  Torrens  Act  as  it  at 
present  exists,  you  cannot  create  a  homestead  after  your  title  is 
registered. 


103 


VII. 

Landlord  and  Tenant 

Any  property  which  is  capable  of  being  conveyed  is  capable  of 
being  leased,  and  a  leasehold  estate  becomes  personal  property,  no 
matter  for  what  length  of  term  it  is  written,  although  a  long  term 
lease,  such  as  one  from  50  to  99  years,  approaches  very  nearly  to  the 
dignity  of  a  fee  title.  Hence  in  leases  for  such  terms  great  care  is 
exercised  in  the  preparation  of  the  lease  that  every  possible  contin- 
gency may  be  foreseen  and  provided  for.  Usually  such  investments 
are  made  in  such  leases  that  the  lessee  is  practically  the  owner  of 
the  property  during  the  term  of  his  lease,  and  it  is  usually  provided 
that  there  are  no  liabilities  or  responsibilities  on  the  part  of  the 
lessor,  all  of  the  burden  of  improvement,  and  cost  of  maintenance 
of  the  property  being  imposed  upon  the  lessee,  the  landlord  receiv- 
ing but  the  agreed  rent  at  stated  periods.  Thus  many  of  the  ques- 
tions which  continually  arise  touching  the  respective  rights  of  land- 
lord and  tenant  are  practically  done  away  with  in  these  long  term 
leases.  It  is  then  with  the  short  term  leases,  either  verbal  or  written 
with  which  this  paper  shall  deal. 

Leases  of  agricultural  or  horticultural  land  cannot  be  made  in 
this  State  for  a  longer  period  than  fifteen  years,  except  for  lands 
used  for  agricultural  or  horticultural  purposes  upon  which  is  dis- 
charged waste  water  or  sewage  from  any  municipality.  Such  lands 
may  be  leased  for  a  period  not  longer  than  twenty-five  years.  City 
lots  may  be  leased  for  a  period  of  not  longer  than  ninety-nine  years. 
Any  real  estate  belonging  to  a  municipality,  minor,  or  incompetent 
person  cannot  be  leased  for  a  longer  period  than  ten  years,  except 
lands  used  for  agricultural  or  horticultural  purposes,  upon  which  is 
discharged  waste  water  or  sewage  by  any  municipality.  In  such 
cases  the  land  can  be  leased  for  a  period  not  longer  than  twenty- 
five  years. 

A  trustee  of  an  express  trust  cannot  lease  the  land  beyond  the 
period  of  his  trust,  unless  it  be  otherwise  provided  in  the  trust 
agreement.  A  trustee  of  an  express  trust  has  power  to  lease  the 
property  for  the  benefit  of  annuitants,  devisees,  legatees  or  other 
beneficiaries,  or  for  the  purpose  of  satisfying  any  charge  thereon. 

Any  person  competent  to  make  a  deed  is  competent  to  execute 

104 


a  lease,  therefore  it  would  be  well  to  bear  in  mind  that  the  rules  up- 
on which  we  have  touched  governing  the  powers  of  individuals  or 
corporations  to  make  deeds  are  applicable  to  the  execution  of 
leases.  If  the  lease  is  for  more  than  one  year  and  is  made  by  an 
agent  of  the  owner,  the  agent's  authority  must  be  in  writing  or  the 
lease  is  invalid,  and  cannot  be  enforced  by  the  landlord  against  the 
lessee.  Therefore,  if  you  are  taking  a  lease  through  an  agent  and 
the  lease  is  executed  by  the  agent  in  the  name  of  the  principal,  it 
is  incumbent  upon  you  if  the  lease  is  for  more  than  one  year,  to  call 
for  the  written  authority  of  the  agent  and  determine  therefrom 
what  his  powers  may  be.  The  lessor  when  he  lets  or  leases  the 
property  is  held  to  covenant  that  he  is  entitled  so  to  do,  and  that 
so  long  as  the  lessee  complies  with  the  terms  of  his  lease  he  shall 
have  peaceable  and  undisturbed  possession  of  the  premises,  so,  if 
the  title  fails  or  it  be  shown  that  some  one  other  than  the  lessee  has 
the  right  of  possession,  the  lessee  is  relieved  from  the  obligations 
of  his  lease  and  may  recover  damages  from  the  lessor  if  he  has  been 
misled  to  his  injury. 

This  covenant  for  peaceable  possession  applies  only  to  the  acts 
done  by  the  lessor,  or  those  claiming  under  him.  whereby  he  inter- 
feres with  the  right  of  possession  of  his  lessee,  but  the  lessor  is  not 
held  to  covenant  against  the  acts  or  depredations  of  the  title  of  a 
stranger.  He  must  himself  be  responsible  for  the  disturbance  of 
the  peaceful  possession,  otherwise  he  is  not  liable.  Thus  if  a  lessor 
lease  to  a  tenant  a  store  room  and  thereafter  proceeds  to  make  such 
alterations  of  the  stories  above  the  store  room,  or  of  adjoining 
rooms,  that  the  occupation  and  possession  of  his  lessee  is  disturbed, 
and  the  lessee  suffers  detriment  and  inconvenience  in  his  business, 
the  lessor  can  be  held  liable  for  the  damage  suffered  by  his  lessee. 
The  lessor  is  not  held  liable  on  this  covenant  for  peaceable  posses- 
sion if  the  premises  be  destroyed  by  the  act  of  God,  or  by  any 
agency  for  which  the  lessor  could  not  be  held  responsible.  If  the 
building  is  injured  by  excavations  made  by  an  adjoining  owner  and 
should  tumble  down,  the  lessor  is  not  liable  on  this  covenant  if 
tenant  have  knowledge  of  the  excavations  and  the  risk  thereof  and 
elects  to  remain  in  the  building.  This  of  course  in  the  absence  of 
an  express  covenant  between  the  lessor  and  the  lessee  as  to  any 
especial  liabilities  placed  upon  the  lessor. 

The  lessor  of  a  building  intended  for  the  occupation  of  human 
beings  must,  in  the  absence  of  an  agreement  to  the  contrary,  put  it 
in  a  condition  fit  for  such  occupation  and  repair  all  subsequent 
dilapidations  thereof  except  those  caused  by  the  want  of  ordinary 
care  on  the  part  of  the  lessee.  After  the  lessor  has  placed  the 
premises  in  such  condition  he  cannot  thereafter  be  held  liable  for 

105 


dilapidations  caused  by  the  tenant  or  for  dilapidations  of  any  addi- 
tions or  improvements  made  by  the  tenant  himself.  As  we  have 
said,  the  lessee  is  entitled  to  the  peaceable  possession  of  the  premises 
free  from  any  interference  or  disturbance  by  his  landlord,  for  his 
estate,  while  he  is  entitled  to  the  possession  under  his  lease,  extends 
to  the  entire  domination  over  the  property  so  far  as  occupancy  and 
possession  are  concerned.  The  landlord  has  no  more  right  to  enter 
upon  the  premises  than  has  a  stranger,  provided  always,  that  the 
lessee  has  performed  the  covenants  and  conditions  imposed  upon 
him  by  the  lease. 

One  who  hires  part  of  a  room  for  a  dwelling  is  entitled  to  the 
whole  of  the  room,  any  agreement  to  the  contrary  notwithstanding. 
If  a  landlord  lets  a  room  as  a  dwelling  for  more  than  one  family,  the 
person  to  whom  he  first  lets  any  part  of  it  is  entitled  to  the  posses- 
sion of  the  whole  room  for  the  term  agreed  upon,  and  every  tenant 
in  the  building  under  the  same  landlord  is  relieved  from  all  obliga- 
tion to  pay  rent  to  him  while  such  double  letting  of  any  room 
continues. 

The  lessee  impliedly  covenants  to  use  the  property  only  for 
lawful  purposes  and  should  he  put  it  to  an  unlawful  use,  the  lessor 
may  cancel  the  lease  and  recover  possession  of  his  property.  There 
is  a  penalty  imposed  upon  a  lessor  if  he  leases  or  lets  the  premises 
for  unlawful  purposes,  the  first  penalty  being  that  he  cannot 
recover  rent  or  enforce  the  covenants  under  the  lease,  as  such 
contracts  are  against  public  policy. 

There  was  a  Statute  enacted  April  7,  1913,  popularly  known  as 
a  "Redlight  Abatement  Act,"  wherein  it  is  provided  that  the  term 
"building"  as  used  in  the  Act  shall  be  deemed  and  held  to  mean  and 
include  so  much  of  any  building  or  structure  of  any  kind  as  is,  or 
may  be  entered,  through  the  same  outside  entrance,  and  that  every 
building  or  place  used  for  the  purpose  of  lewdness,  assignation  or 
prostitution  is  a  nuisance  which  shall  be  enjoined,  abated  and 
prevented  by  the  proceedings  outlined  in  said  Act,  whether  the  same 
be  a  public  or  private  nuisance.  Whenever  there  is  reason  to 
believe  that  such  nuisance  is  kept,  maintained  or  exists,  the  District 
Attorney  of  the  county  must,  or  any  citizen  resident  of  the  State 
within  the  county,  may,  in  his  own  name  maintain  an  action  in 
equity  to  abate  and  prevent  such  nuisance,  and  to  perpetually 
enjoin  the  person  or  persons  conducting  or  maintaining  the  same, 
and  the  owner,  lessee,  or  agent  of  the  building  or  place  in  or  upon 
which  such  nuisance  exists,  from  directly  or  indirectly  maintaining 
or  permitting  such  nuisance.  Upon  the  filing  of  a  verified  complaint, 
the  Judge  will  allow  a  temporary  writ  of  injunction  to  abate  and 
prevent  the  continuance  or  recurrence  of  such  nuisance.    Any  viola- 

106 


tion  or  disobedience  of  this  injunction  will  be  punished  as  contempt 
of  Court  by  a  fine  of  not  less  than  $200  nor  more  than  $1,000,  or  by 
imprisonment  in  the  county  jail  for  not  less  than  one  month  or 
more  than  six  months,  or  by  both  such  line  and  imprisonment. 
If  the  existence  of  the  nuisance  be  established  in  the  action,  an  order 
of  abatement  will  be  entered  as  a  part  of  the  judgment  in  the  case, 
which  order  will  direct  the  removal  from  the  building  or  place  of  all 
fixtures,  musical  instruments  and  movable  property  used  in  con- 
ducting, maintaining,  aiding  or  abetting  the  nuisance,  and  shall 
direct  the  sale  thereof  in  a  manner  provided  for  the  sale  of  chattels 
under  execution,  and  will  direct  the  efTectual  closing  of  the  building 
or  place  against  its  use  for  any  purpose,  and  so  keep  it  closed  for  a 
period  of  one  year.  While  such  order  remains  in  effect  as  to  closing, 
the  building  will  remain  in  the  custody  of  the  Court.  The  proceeds 
of  the  sale  of  the  property  removed  is  applied  first  to  the  costs  of 
such  removal  and  sale  and  the  cost  of  closing  and  keeping  closed  the 
building,  the  payment  of  the  costs  in  the  action  and  the  balance,  if 
any,  to  the  owner  of  the  property  so  sold.  If  the  proceeds  of  such 
sale  do  not  fully  discharge  all  such  costs,  fees  and  allowances,  the 
building  and  place  will  be  also  sold  under  execution  and  the  pro- 
ceeds of  the  sale  applied  in  like  manner.  If  the  owner  of  the  build- 
ing or  place  has  not  been  guilty  of  any  contempt  of  Court  in  the 
proceedings,  and  appears  and  pays  all  costs,  fees  and  allowances 
which  are  a  lien  on  the  building  or  place,  and  files  a  bond  in  the  full 
value  of  the  property  to  be  ascertained  by  the  Court,  with  sureties 
to  be  approved  by  the  Court  or  judge,  conditioned  that  he  will 
immediately  abate  any  such  nuisance  and  prevent  the  same  from 
being  established  or  kept  thereat  within  a  period  of  one  year  there- 
after, the  Court  may,  if  satisfied  of  his  good  faith,  order  the  prem- 
ises to  be  delivered  to  the  owner  and  the  order  of  abatement  can- 
celled. 

If  within  a  reasonable  time  after  notice  to  the  owner  of  dilapi- 
dations which  he  ought  to  repair,  he  neglects  to  do  so,  the  lessee 
may  repair  the  same  himself,  where  the  cost  of  such  repairs  does 
not  require  an  expenditure  greater  than  one  month's  rent  of  the 
premises,  and  deduct  the  expenses  of  such  repairs  from  the  rent,  or 
the  lessee  may  vacate  the  premises,  in  which  case  he  shall  be  dis- 
charged from  further  payment  of  rent  or  performance  of  other 
conditions.  But  the  tenant  cannot  so  abandon  the  premises  in  need 
of  repair  and  be  relieved  from  his  obligations  under  the  lease  unless 
he  give  notice  to  the  landlord,  and  the  landlord  is  not  liable  to  the 
tenant  for  injuries  caused  by  defects  of  which  he  has  no  knowledge, 
nor  in  cases  where  the  tenant  fails  to  give  notice  of  defects  in  the 
building.    It  is  otherwise  where  the  premises  are  under  the  control 

107 


of  the  landlord,  as  in  such  case  he  is  liable  without  notice  from  the 
tenant. 

Where,  after  a  fire  the  tenants  continue  to  pay  rent,  they  treat 
the  premises  as  tenantable.  Even  though  the  law  is  that  the  hiring 
terminates  by  destruction  of  the  thing  hired  and  it  is  stipulated 
in  the  hiring  that  upon  destruction  of  the  building  the  lease  shall 
terminate,  the  lessee  is  not  entitled  to  recover  the  proportionate 
amount  of  rental  which  he  has  paid  in  advance.  Though  it  be  stip- 
ulated that  in  case  of  destruction  the  lessee  shall  be  released  from 
the  payment  of  rent  during  the  time  the  premises  are  untenantable 
this  applies  only  to  the  rents  which  are  payable  after  the  destruc- 
tion, and  not  to  any  rentals  paid  in  advance  unless,  of  course,  there 
be  specific  contract  to  that  effect.  The  liabilities  and  rights  of  the 
lessor  and  lessee  upon  destruction  of  the  property  by  the  elements 
is  always  governed  by  their  contract.  In  the  absence  of  the  contract, 
then  upon  destruction  by  the  elements  the  lease  is  terminated,  and 
each  relieved  from  any  obligations  thereunder. 

A  hiring  of  real  property  other  than  lodging  and  dwelling 
houses  in  places  where  there  is  no  usage  on  the  subject,  is  presumed 
to  be  for  one  year  from  its  commencement  unless  otherwise  ex- 
pressed in  the  hiring.  Thus,  in  some  communities  where  lands  are 
let,  we  will  say,  for  the  growing  of  vegetables,  or  for  some  specific 
purpose  for  a  short  time,  and  it  is  the  custom  of  the  community  to 
rent  for  only  six  months,  this  Statutory  presumption  would  not 
apply. 

The  hiring  of  lodging  or  dwelling  houses  for  an  indefinite  term 
is  presumed  to  have  been  made  for  such  length  of  time  as  the 
parties  adopt  for  the  estimation  of  the  rent.  Thus  a  hiring  at  a 
monthly  rate  of  rent  is  presumed  to  be  for  one  month.  In  the 
absence  of  any  agreement  respecting  the  length  of  time  or  rent, 
the  hiring  is  presumed  to  be  monthly.  If  the  lessee  remains  in 
possession  after  the  expiration  of  the  hiring,  and  the  lessor  accepts 
rent  from  him  the  parties  are  presumed  to  have  renewed  the  hiring 
on  the  same  terms  and  for  the  same  time,  not  exceeding  one  month, 
when  the  rent  is  payable  monthly,  nor  in  any  case  exceeding  one 
year.  When  there  is  no  usage  or  contract  to  the  contrary,  rents  are 
payable  at  the  termination  of  the  holding  when  it  does  not  exceed 
one  year.  If  the  holding  is  by  the  day,  week,  month  or  year,  rent 
is  payable  at  the  termination  of  the  respective  periods  as  it  succes- 
sively becomes  due. 

The  lessee  cannot  pay  his  rent  to  any  one  other  than  his  land- 
lord without  his  consent,  or  in  consequence  of  a  judgment  of  a  Court 
of  competent  jurisdiction.  The  right  to  receive  the  rents  and  the 
right  to  continue  in  possession  run  with  the  land  and  inure  to  the 

108 


benefit  of  and  bind  the  successors  and  assigns  of  the  respective 
parties. 

Every  tenant  who  receives  notice  of  any  proceedings  to  recover 
real  property  occupied  by  him,  or  the  possession  thereof,  must 
immediately  inform  his  landlord  thereof,  and  must  deliver  to  the 
landlord  the  notice  if  it  be  in  writing,  and  he  is  responsible  to  the 
landlord  for  all  damages  which  he  may  sustain  by  reason  of  the 
tenant's  failure  so  to  do. 

In  all  leases  of  lands  or  houses  or  of  any  interest  therein,  from 
month  to  month,  the  landlord  may,  upon  giving  notice  in  writing  at 
least  thirty  days  before  the  expiration  of  the  month,  change  the 
terms  of  the  hiring  to  take  effect  at  the  expiration  of  the  month, 
and  this  notice  if  served  upon  the  tenant  binds  him  to  all  the  terms, 
rents,  and  conditions  specified  in  the  notice  if  he  continues  to  hold 
the  premises  after  the  expiration  of  the  month.  This  course  is 
often  resorted  to  to  rid  premises  of  an  undesirable  tenant,  and  is 
very  effective  if  the  tenant  is  financially  responsible. 

A  written  lease  is  binding  on  the  lessee  where  he  has  accepted 
it  and  entered  into  possession,  even  though  he  has  not  signed  the 
lease.  Very  often  it  is  provided  in  leases  that  the  tenant  may  not 
sub-let  or  assign  the  lease  without  the  consent  of  the  lessor.  A 
tenant  who  violates  this  covenant  forfeits  his  rights  under  the 
lease,  provided  that  the  landlord  does  not  acquiesce.  In  other 
words,  where  this  covenant  for  assignment  or  sub-letting  is  violated, 
the  landlord  cannot  object  if  he  afterward  receive  rent  from  the 
assignee  or  sub-tenant. 

The  assignment  of  a  lease  or  sub-letting  of  any  part  of  the 
premises  does  not,  in  the  absence  of  a  contract  to  the  contrary, 
annul  the  lessee's  obligation  to  pay  rents,  even  if  the  landlord 
accepts  rent  from  the  assignee  or  the  sub-lessee.  The  assignees  or 
the  sub-lessees  are  also  bound  for  this  rent,  but  they  are  relieved  if 
they  re-assign  or  surrender  the  sub-lease  to  the  original  lessee. 
The  landlord  can  recover  the  rents  against  the  original  lessee  even 
where  there  was  an  express  covenant  against  sub-letting,  and  the 
lessor  has  accepted  rent  from  the  sub-lessee.  The  original  lessee  is 
surety  for  his  sub-lessee  unless  the  lessor  release  him.  It  is  usual, 
particularly  in  long  term  leases,  to  make  provision  that  upon  assign- 
ment of  the  lease  that  the  assignor  shall  after  consent  by  the  lessor, 
be  relieved  from  all  obligations  under  the  lease  and  contract  from 
and  after  the  date  of  his  assignment,  and  also  to  make  provision  that 
any  assignee  shall  upon  receipt  of  an  assignment,  agree  in  terms  to 
pay  the  rent  and  perform  the  obligations  of  the  lease.  This  is  par- 
ticularly good  practice  in  long  term  leases,  as  by  the  very  nature  of 
the  estate  it  rises  almost  to  the  dignity  of  a  fee,  and  the  lessee  has 

109 


the  practical  ownership  of  the  premises  and  where  the  successive 
assignees  or  successors  in  interest  of  the  original  lessee  have 
assumed  the  payment  of  the  rents,  he  should  not  in  fairness  and 
justice  be  held  to  the  payment  of  the  rents  or  other  performances  of 
the  covenants  of  the  lease  after  he  has  parted  with  his  title. 

Where  the  lessee  abandons  the  premises  and  refuses  to  perform 
the  terms  of  the  hiring,  the  landlord  has  two  remedies.  He  may  sue 
for  each  installment  of  the  rental  as  it  becomes  due,  or  he  can  take 
possession  of  the  premises  and  re-let  the  same  upon  the  best  terms 
obtainable  and  recover  the  difference  between  the  rents  thus  re- 
ceived and  the  amount  promised  to  be  paid  by  the  lessee  who  has 
abandoned.  He  cannot  under  the  terms  of  his  lease  sue  for  the 
entire  amount  of  the  rents  therein  expressed.  He  can  only  sue  for 
the  installments  which  accrue  from  time  to  time. 

The  lessor  can  only  recover  the  actual  damage  suffered  by  him. 
Household  goods  and  articles  of  wearing  apparel  and  adornment 
cannot  be  seized  or  levied  upon  for  rent.  By  special  act,  hotel,  inn, 
boarding  house  and  lodging  house  keepers  have  a  lien  upon  the 
baggage  and  other  property  of  value  of  their  guests,  or  boarders,  or 
lodgers  brought  into  such  hotel,  inn,  boarding,  or  lodging  house  by 
such  guests,  or  boarders,  or  lodgers,  for  the  proper  charges  due 
from  such  guests,  or  boarders,  or  lodgers,  for  their  accommodation, 
board  and  lodging,  room  rent,  and  such  extras  as  are  furnished  at 
their  own  request,  with  the  right  to  the  possession  of  such  baggage 
or  other  property  of  value  until  all  such  charges  are  paid,  and  this 
lien  extends  to  the  property  of  a  stranger,  provided  that  the  inn- 
keeper has  no  knowledge  of  that  fact,  and  it  extends  to  the  sample 
goods  carried  by  a  travelling  salesman. 

A  chattel  mortgage  may  be  made  on  personal  property  includ- 
ing growing  crops,  grapes  and  fruit,  and  upon  any  and  all  kinds  of 
personal  property,  except  personal  property  not  capable  of  manual 
delivery,  articles  of  wearing  apparel  and  personal  adornment  and 
the  stock  in  trade  of  a  merchant.  It  often  occurs  in  leases  of  farm- 
ing lands  that  the  landlord  shall  have  a  certain  percentage  of  the 
crops  as  rent,  and  the  title  to  all  the  crops  shall  remain  in  the  land- 
lord until  sold,  or,  there  is  agreement  not  to  sell  the  tenant's  share 
of  the  crop  without  the  consent  of  the  landlord.  This  covenant  does 
not  create  a  lien  upon  the  share  of  the  tenant  as  against  any  attack- 
ing creditor  of  the  tenant,  even  after  the  crops  have  been  harvested 
and  sacked  or  stored.  If  the  landlord  desires  to  protect  himself 
against  general  creditors  of  the  tenant,  he  must  take  a  chattel  mort- 
gage on  the  crop  and  file  it  in  the  recorder's  office.  Of  course  any 
sort  of  security  may  be  taken  for  the  performance  of  the  covenants 
of  any  lease,  or  for  the  payment  of  any  rent,  but  it  must  be  borne 

110 


in  mind  as  above  stated,  that  the  lessor  can  recover  only  actual 
damages  upon  abandonment  by  the  lessee. 

Now  as  to  fixtures. 

There  is  a  distinction  to  be  borne  in  mind  here.     The  term 
"fixtures"  in  a  strict  sense  applies  to  that  which  is  affixed  to  and  is 
a  part  of  the  land  itself,  while  the  term  is  used  in  another  sense 
meaning  such  appliances  and  structures  or  articles  placed  upon  the 
property  which  may  be  removed  and  which  do  not  constitute  a 
part  of  the  land.     Under  this  category  fall  trade  fixtures.     Real  or 
immovable  property  consists  of  land,  and  that  which  is  affixed  to 
land.    That  which  is  incidental  to  or  appurtenant  to  land  and  that 
which  is  immovable  by  law.    Thus,  a  building  placed  upon  land  by 
a  lessee  with  the  privilege  of  removing  it  at  the  termination  of  the 
lease  is  real  property  until  it  be  severed.    A  thing  is  deemed  to  be 
affixed  to  land  when  it  is  attached  to  it  by  roots,  as  in  the  case  of 
trees,  vines  or  shrubs  or  embedded  in  it  as  in  the  case  of  walls  or 
permanently  resting  upon  it  as  in  the  case  of  buildings,  or  perma- 
nently attached  to  what  is  thus  permanent  by  the  means  of  cement, 
nails,  plaster,  bolts  or  screws.     A  fixture  has  been  defined  as  an 
article  of  personal  property  attached  to  the  freehold.    An  annexation 
is  necessary  to  constitute  a  fixture.     Any  personal  property  affixed 
to  the  land  for  the  purpose  of  permanent  improvement  or  for  the 
use  of  the  real  estate  makes  the  fixture  appurtenant  to  the  land  and 
is  not  removable  by  the  tenant.     Whether  a  structure  is  a  fixture 
depends  on  the  nature  and  character  of  the  act  by  which  it  is  put  in 
its  place,  and   the  purpose   for  which  it  is  intended  to  be  used. 
Thus,  if  the  owner  place  permanent  structures  on  the  land,  or  other 
improvements   which   by   their  very   nature   show  that  they  were 
intended   for  permanent  use,   and  for  the  better  use  of  the-  land 
permanently,  they  become  immovable  fixtures.    On  the  other  hand, 
if  it  be  placed  but  temporarily  on  the  land  and  not  permanently 
affixed  thereto,  or  to  any  structure,  then  on  the  land,  it  is  a  question 
of  intent  of  the  one  placing  it  thereon  as  to  whether  or  not  it  is  an 
immovable  fixture.    The  intention  of  the  party  making  the  annexa- 
tion is  the  chief  element  to  be  considered  in  determining  what  are 
fixtures.    If  a  tenant,  no  matter  what  his  intention  might  be,  should 
build  permanent  and  substantial  structures  upon  the  land,  or  make 
additions  or  annexations  to  the  structures  already  thereon,  and  in 
such  manner  as  to  give  any  one  the  impression  that  it  was  his 
intention  they  should  be  permanent,  he  cannot  remove  the  same  at 
the  expiration  of  his  term.     The  intention  must  clearly  appear  to 
make  an  article  of  personal  property  part  of  the  land.    As  between 
the  lessor  and  the  lessee,  whether  a  building  or  other  improvement 
becomes  a  fixture,  is  a  matter  of  agreement  and  the  intention  of 

111 


the  party.  It  is  a  general  rule  that  any  fixture  which  by  its  nature 
does  not  become  an  integral  part  of  the  premises  may  be  removed 
by  the  tenant  during  his  term.  If  he  fail  to  do  so  at  the  expiration 
of  his  term,  it  then  becomes  a  part  of  the  realty. 

All  fixtures  annexed  by  the  owner  pass  to  a  mortgagee  whether 
they  be  fixtures  for  trade  or  manufacture,  agriculture  or  habitation. 
The  machinery  in  a  factory  held  in  place  and  steadied  by  screws  to 
the  floor  and  connected  to  the  rest  of  the  building  with  shafting  or 
belting,  but  removable  without  injury  to  the  building,  is  not  appur- 
tenant to  the  land.  Buildings  or  cabins  set  upon  blocks  resting  on 
the  ground,  not  attached  to  the  soil  and  removable  without  disturb- 
ing the  land  in  any  way,  are  not  fixtures  and  are  not  appurtenant  to 
the  land.  All  appliances  or  additions  which  are  made  as  I  have 
stated,  of  a  permanent  character,  and  attached  to,  and  made  an 
integral  part  of  the  premises  cannot  be  removed  by  the  lessee ;  nev- 
ertheless all  trade  fixtures,  all  things  brought  upon  the  land  for  the 
purpose  of  conducting  his  business,  and  which  may  be  removed 
from  the  property  without  disturbing  the  property,  and  which  have 
not  been  permanently  and  substantially  attached  to  the  land,  or  the 
building  thereon,  may  be  removed  by  the  tenant  at  the  expiration 
of  his  lease.  Thus,  the  building  of  a  marble  front  to  a  building,  the 
placing  therein  of  plate  glass,  although  the  same  be  attached  to  the 
building  by  screws  and  the  marble  can  be  easily  removed,  is  a  per- 
manent improvement  and  cannot  be  removed  by  the  lessee.  Awn- 
ings, swinging  doors,  screen  doors  and  the  like  may  be  removed  by 
the  lessee  if  placed  on  the  premises  by  him,  if  they  be  not  intended 
as  permanent  improvements.  Pipes  placed  in  the  building  for 
conducting  water  therein  belong  to  the  land.  A  permanent  furnace 
built  in  the  house  becomes  a  part  of  the  land.  A  portable  furnace, 
however,  placed  therein  is  not  a  part  of  the  land.  Tanks  placed 
upon  the  property,  if  intended  to  be  for  permanent  use  upon  the 
land,  and  which  add  value  to  the  land  itself  for  all  purposes,  belong 
to  the  land.  Not  so,  however,  if  they  are  placed  upon  land  by  a 
tenant  simply  for  use  in  the  conduct  of  his  own  business,  and  in 
cases  where  they  do  not  add  to  the  intrinsic  value  of  the  land 
All  sluice  boxes,  flumes,  hose  pipes,  railway  tracks,  cars,  black- 
smith shops,  mills,  all  other  tools  or  machinery  used  in  working  or 
developing  a  mine  are  deemed  affixed  to  the  mine. 

When  a  person  affixes  his  property  to  the  land  of  another 
without  an  agreement  permitting  him  to  remove  it,  the  thing 
affixed  belongs  to  the  owner  of  the  land  unless  he  chooses  to  require 
the  former  to  remove  it,  but  a  tenant  may  remove  from  the  demised 
premises  any  time  during  the  continuance  of  his  term  anything 
affixed  thereto  for  the  purposes  of  trade,  ornament  or  domestic  use 

112 


if  the  removal  can  be  effected  without  injury  to  the  premises,  unless 
the  thing  has  by  the  manner  in  which  it  has  been  affixed  become  an 
integral  part  of  the  premises.  It  will  be  observed  that  this  right 
exists  only  during  the  continuance  of  his  term.  If  he  forfeit  his 
lease  and  the  landlord  re-enter  on  account  of  the  forfeiture,  he  has 
not  the  right  to  remove  any  fixtures  placed  on  the  premises  by  him. 

A  mere  trespasser  upon  land  is  not  a  tenant,  and  one  is  not 
required  to  give  notice  to  vacate.  If  one  enters  the  premises  while 
he  is  negotiating  with  the  owner  for  a  lease,  and  pending  the  leasing 
he  is  a  tenant  at  will  of  the  landlord,  and  one  who  enters  the  prem- 
ises with  permission  of  the  owner  and  without  stipulation  as  to  the 
time  he  is  to  occupy  it,  is  a  tenant  at  will.  A  tenant  who  holds  over 
his  lease  without  the  consent  of  the  owner  is  not  a  tenant  at  will. 
A  tenancy  or  other  estate  at  will,  however  created  may  be  termin- 
ated by  the  landlord  by  giving  a  notice  to  the  tenant  to  remove  from 
the  premises  within  a  period  of  not  less  than  thirty  days,  to  be 
specified  in  the  notice,  and  after  the  notice  has  been  served,  and  the 
period  specified  by  such  notice  has  expired,  but  not  before,  the  land- 
lord may  re-enter  and  proceed  according  to  law  to  recover  posses- 
sion. Where  the  right  of  re-entry  is  given  to  a  lessor  in  any  lease, 
he  may  make  such  re-entry  at  any  time  before  the  termination  of 
the  lease  by  its  terms,  if  the  terms  of  the  lease  have  been  violated  by 
the  lessee,  by  giving  him  three  days  notice  of  his  intention  to  re- 
enter, but  after  the  right  to  re-enter  has  accrued  by  the  terms  of  the 
lease,  that  is  to  say,  at  its  expiration,  he  may  re-enter  or  maintain 
an  action  for  the  possession  without  any  notice  whatever. 

Every  person  is  guilty  of  a  forcible  entry  who  either  by  break- 
ing open  doors,  window  or  other  parts  of  a  house,  or  by  any  kind 
of  violence  or  circumstances  of  terror  enters  upon  or  into  any  real 
property,  or  after  entering  peaceably  upon  real  property  turns  out 
by  force,  threats  or  menacing  conduct  the  party  in  possession.  Every 
person  is  guilty  of  forcible  detainer  who  either  by  force  or  by  men- 
ace and  threats  of  violence  unlawfully  holds  and  keeps  the  posses- 
sion of  any  real  property,  whether  the  same  was  acquired  peaceably 
or  otherwise,  or  who  in  the  night  time  or  during  the  absence  of  the 
occupant  of  any  lands  unlawfully  enters  upon  any  real  property  and 
who  after  the  demand  made  for  the  surrender  thereof  for  the  period 
of  five  days  refuses  to  surrender  the  same  to  such  former  occupant. 

The  occupant  of  real  property  within  the  meaning  of  this 
Statute  is  one  who  within  five  days  preceding  such  unlawful  entry 
was  in  the  peaceable  and  undisturbed  possession  of  such  lands. 
One  cannot  be  guilty  of  forcible  entry  or  forcible  detainer  if  he 
enter  upon  the  premises  with  the  permission  of  the  owner  or  any 
one   in   po-ssession    under   the   owner,   but   one   may   be   guilty   of 

113 


forcible  detainer  if  he  peaceably  enter  premises  which  are  unoccu- 
pied and  refuses  to  deliver  possession  thereof  to  the  one  entitled  to 
possession  after  the  five  day  notice  to  him  to  surrender  possession. 
It  is  not  essential  to  the  forcible  detainer  that  the  premises  be 
occupied  when  the  one  guilty  of  the  detainer  enters.  He  is  held  to 
disturb  the  possession  of  the  one  entitled  to  possession.  One  who 
has  occupied  under  a  lease  or  a  letting,  and  his  time  has  expired,  is 
not  guilty  of  forcible  entry  or  forcible  detainer,  and  the  five  days 
demand  referred  to  need  not  be  made. 

A  tenant  of  real  property  is  guilty  of  unlawful  detainer  first, 
when  he  continues  in  possession  in  person,  or  by  sub-tenant  of  the 
property  or  any  part  thereof,  after  the  expiration  of  the  term  for 
which  it  is  let  to  him,  without  the  permission  of  his  landlord  or 
the  successor  in  estate  of  his  landlord,  if  any  there  be.  Second: 
when  he  continues  in  possession  in  person,  or  by  sub-tenant,  with- 
out the  permission  of  his  landlord,  or  the  successor  in  estate  of  his 
landlord,  if  any  there  be,  after  default  in  the  payment  of  rent 
pursuant  to  the  lease  or  agreement  under  which  the  propert}'  is  held, 
and  three  days  notice  in  writing  requiring  its  payment,  (stating  the 
amount  which  is  due)  or  possession  of  the  property,  shall  have  been 
served  upon  him,  and  if  there  is  a  sub-tenant  in  actual  occupation 
of  the  premises,  also  upon  such  sub-tenant.  Such  notice  may  be 
served  at  any  time  within  one  year  after  the  rent  becomes  due. 
In  all  cases  of  tenancy  upon  agricultural  lands  where  the  tenant  has 
held  over  and  retained  possession  for  more  than  60  days  after  the 
expiration  of  the  term  without  any  demand  of  possession  or  notice 
to  quit  by  the  landlord,  or  the  successor  in  estate  of  his  landlord,  if 
any  there  be,  he  is  deemed  to  be  holding  by  permission  of  the  land- 
lord or  his  successor,  if  any  there  be,  and  is  entitled  to  hold  under 
the  terms  of  the  lease  for  another  full  year,  and  he  is  not  guilty  of 
an  unlawful  detainer  during  said  year  and  such  holding  over  for  the 
period  aforesaid  is  taken  and  construed  as  a  consent  on  the  part  of 
a  tenant  to  hold  for  another  year.  Third,  when  he  continues  in 
possession  in  person  or  by  sub-tenant  after  a  neglect  or  failure  to 
perform  other  conditions  or  covenants  of  the  lease  or  agreement 
under  which  the  property  is  held,  including  any  covenant  not  to 
assign  or  sub-let,  and  three  days  notice  in  writing  requiring  the 
performance  of  such  conditions  or  covenants  for  the  possession  of 
the  property  shall  have  been  served  upon  him,  and  if  there  is  a 
sub-tenant  in  actual  occupation  of  the  premises,  also  upon  such 
sub-tenant.  Within  three  days  after  the  service  of  the  notice  the 
tenant  or  any  sub-tenant  in  actual  occupation  of  the  premises,  or 
any  mortgagee  of  the  lease,  or  other  person  interested  in  its  con- 
tinuance may  perform  the  conditions  of  covenants  of  the  lease,  or 

114 


pay  the  stipulated  rent  as  the  case  may  be,  and  thereby  save  the 
lease  from  forfeiture,  provided  that  the  conditions  and  covenants  of 
the  lease  violated  by  the  lessee  cannot  afterward  be  performed, 
then  no  notice  need  be  given  to  said  lessee  or  his  sub-tenant  demand- 
ing the  performance  of  the  violated  conditions  or  covenants  of  the 
lease.  Any  tenant  may  take  similar  proceedings  to  obtain  posses- 
sion of  the  premises  let  to  a  sub-tenant  in  case  of  his  unlawful 
detention  of  the  premises  under-let  to  him.  Fourth :  Any  tenant 
or  sub-tenant  assigning  or  sub-letting  or  committing  waste  upon 
the  demised  premises  contrary  to  the  conditions  or  covenants  of 
his  lease,  thereby  terminates  the  lease,  and  the  landlord  or  his 
successor  in  estate  upon  service  of  three  days  notice  to  quit  upon 
the  person  or  persons  in  possession  is  entitled  to  restitution  of 
possession.  The  notices  required  to  be  served  may  be  served  either 
by  delivering  a  copy  to  the  tenant  personally,  or  if  he  be  absent  from 
his  place  of  residence  and  from  his  usual  place  of  business  by  leav- 
ing a  copy  with  some  person  of  suitable  age  and  discretion  at  either 
place  and  sending  a  copy  through  the  mail  addressed  to  the  tenant 
at  his  place  of  residence,  or  if  such  place  of  residence  and  business 
cannot  be  ascertained,  or  a  person  of  suitable  age  or  discretion 
there  cannot  be  found,  then  by  affixing  a  copy  in  a  conspicuous 
place  on  the  property  and  also  delivering  a  copy  to  a  person  there 
residing,  if  such  person  can  be  found,  and  also  sending  a  copy 
through  the  mail  addressed  to  the  tenant  at  the  place  where  the 
property  is  situated.  Service  upon  a  sub-tenant  may  be  made  in  the 
same  manner. 

These  points  should  be  remembered.  It  is  not  necessary  to 
give  notice  to  the  tenant  where  the  term  is  fixed  by  the  lease  and  the 
term  has  expired,  but  it  is  necessary  to  give  him  three  days  notice 
if  the  lease  is  terminated  by  breach  of  any  covenant  before  the 
term  stated  in  the  lease. 

Where  one  is  a  tenant  at  will  of  the  landlord,  thirty  days  notice 
to  him  is  required. 

Where  one  is  a  tenant  from  month  to  month,  notice  of  thirty 
day  to  quit  and  three  days  notice,  and  demand  for  payment  of  rent 
is  necessary. 

Where  one  is  guilty  of  forcible  entry  and  detainer,  five  days 
notice  is  required. 

The  proof  of  the  service  of  these  notices  must  be  made  on  the 
trial.  They  cannot  be  proven  by  affidavits.  If  the  tenant  refuses 
to  vacate  the  property  after  the  legal  notice  is  given,  the  landlord 
has  a  right  of  action  for  forcible  entry  and  detainer,  or  unlawful 
detainer  as  the  case  may  be,  the  proceedings  being  outlined  in  the 
Code. 

115 


Suffice  it  to  say  here,  that  it  is  a  summary  action.  The  sum- 
mons requires  but  three  days  service,  and  if  the  complaint  estab- 
lishes to  the  satisfaction  of  the  Court,  that  fraud,  force  or  violence 
in  the  entry  or  detainer  occurs,  and  that  the  possession  held  is 
unlawful,  the  Court  may  make  an  order  for  the  arrest  of  the 
defendant.  On  the  trial  of  any  proceeding  for  forcible  entry  or 
forcible  detainer,  the  plaintiff  is  only  required  to  show,  in  addition 
to  the  forcible  entry  or  forcible  detainer,  that  he  was  peaceably  in 
the  actual  possession  at  the  time  of  the  forcible  entry,  or  was 
entitled  to  possession  at  that  time.  If  the  alleged  unlawful  detainer 
be  after  default  in  the  payment  of  rent,  judgment  against  the  defend- 
ant guilty  of  forcible  entry  or  unlawful  detainer  may  be  entered  in 
the  discretion  of  the  Court  either  for  the  amount  of  damages  found 
by  the  Court  or  jury,  or  for  three  times  the  amount  so  found.  When 
the  proceeding  is  for  an  unlawful  detainer  after  a  default  in  the 
payment  of  rent  under  a  lease  which  has  not  by  its  terms  expired, 
the  judgment  is  not  enforced  for  five  days  after  the  entry  of  the 
judgment  within  which  time  the  tenant  or  any  sub-tenant  or  any 
mortgagee  of  the  lease  or  any  party  interested  in  its  continuance 
may  pay  into  Court  the  amount  of  the  judgment  and  the  tenant  will 
be  restored  to  his  estate. 

It  must  be  remembered  that  these  actions  for  forcible  entry  and 
for  forcible  or  unlawful  detainer  have  no  bearing  upon  the  title  to 
the  land.  They  only  go  to  the  right  of  possession,  hence  the  land- 
lord himself  may  be  guilty  of  forcible  entry  if  he  disturbs  the 
possession  of  the  one  entitled  to  the  possession.  The  object  of  this 
summary  proceeding  is  to  give  quick  remedy  to  one  entitled  to  the 
possession  of  the  premises  who  was  unlawfully  excluded  therefrom, 
thus  saving  him  long  delays  by  actions  of  ejectment  or  to  quiet 
title.  They  are  devised  and  intended  to  prevent  disturbances, 
personal  encounters  and  violence.  No  one  is  entitled  to  enter  and 
disturb  the  possession  of  another  by  threats  and  violence,  no  matter 
what  his  legal  rights  may  be.  If  one  is  excluded  from  his  land  by  an 
intruder,  and  if  he  at  any  time  find  the  intruder  off  the  land,  he 
himself  can  enter  and  exclude  the  intruder  without  process  of  law. 


116 


VIII. 

Contracts  of  Sale— Options— Escrows 

It  is   essential   to   every   contract   relating  to   land   that   there 

should  be : 

1.  Parties  capable  of  contracting. 

2.  Their  consent. 

3.  A  lawful  object  and 

4.  A  sufficient  cause  or  consideration. 

All  persons  are  capable  of  contracting,  except  minors,  per- 
sons of  unsound  mind  and  persons  deprived  of  civil  rights.  The 
same  rules  apply  to  contracts  in  relation  to  the  sale  or  purchase 
of  lands  as  apply  to  deeds  of  minors  and  persons  of  unsound 
mind.  The  contract  by  a  minor  under  the  age  of  18  years  is  void 
and  requires  no  disaffirmance.  If  made  when  over  the  age  of  18 
years  it  may  be  disaffirmed  by  the  minor  when  he  reaches  the 
age  of  21  years  or  within  a  reasonable  time  thereafter  if  he  sur- 
vives, or  if  he  die  within  the  period,  by  his  heirs  or  legal  repre- 
sentatives. 

A  contract  by  one  of  unsound  mind,  but  who  has  not  been  ju- 
dicially declared  to  be  so  and  committed,  is  not  void,  but  voidable, 
and  may  be  rescinded  when  he  is  restored  to  capacity.  A  con- 
tract made  by  a  person  of  unsound  mind  who  has  been  committed 
to  an  asylum,  or  who  has  a  guardian,  is  void.  Contracts  may  be 
enforced  against  a  minor  or  a  person  of  unsound  mind  for  the 
necessities  of  life,  when  not  under  the  care  of  a  parent  or  guar- 
dian able  to  supply  them,  but  this  does  not  apply  to  contracts  for 
sale  and  purchase  of  land.  Husband  and  wife  may  enter  into  con- 
tracts with  each  other  respecting  their  property  as  if  they  w^ere 
unmarried.  A  contract  made  expressly  for  the  benefit  of  a  third 
person  may  be  enforced  by  him  at  any  time  before  the  parties 
thereto  rescind  it. 

It  is  absolutely  essential  to  a  valid  contract  that  there  be  a 
meeting  of  minds  of  the  parties.  There  must  be  a  consent  which 
is  free,  mutual  and  commui'^icated  by  each  to  the  other.  A  con- 
sent which  is  not  free  is  not  absolutely  void,  but  voidable,  and 
gives  the  right  of  rescission  to  the  aggrieved  party.  An  apparent 
consent  is  not  real  or  free  when  obtained  through  duress,  menace, 

117 


fraud,  undue  influence  or  mistake.  Consent  is  not  mutual  unless 
all  the  parties  agree  upon  the  same  thing  in  the  same  sense.  The 
words  used  are  to  be  understood  in  their  ordinary  and  popular 
sense,  rather  than  according  to  their  strict  legal  meaning,  or  un- 
less a  special  meaning  is  given  to  them  by  usage. 

The  scope  of  this  paper  will  be  confined  to  the  subjects  of 
contract,  relating  to  the  sale  and  purchase  of  lands,  and  escrows. 
As  to  the  first  of  these  topics,  it  is  well  to  emphasize  these  points : 
to  constitute  a  valid  contract  for  sale  and  purchase  there  must  be 
parties  capable  of  contracting,  there  must  be  a  meeting  of  minds 
and  a  mutual  consent  and  agreement ;  there  must  be  a  lawful  con- 
sideration and  a  lawful  object;  the  contract  must  be  equitable 
and  must  be  in  writing.  There  may  exist  circumstances  under 
which  a  court  of  equity  will  enforce  a  verbal  contract  for  the  sale 
and  purchase  of  real  property ;  as  when  the  parties  have  acted 
upon  it  and  the  one  seeking  to  enforce  has  performed  the  obliga- 
tions imposed  upon  him,  or  has  partially  performed  and  offers  in 
good  faith  to  fully  perform.  Or,  where  such  contract  is  prevented 
from  being  put  into  writing  by  the  fraud  of  a  party  thereto,  any 
other  party  who  is  by  such  fraud  led  to  believe  that  it  is  in  writ- 
ing and  acts  upon  such  belief  to  his  prejudice  may  enforce  it 
against  the  fraudulent  party. 

An  agreement  for  leasing  for  a  longer  period  than  one  year, 
or  for  the  sale  of  real  property,  or  of  an  interest  therein  must  be 
in  writing,  subscribed  by  the  party  to  be  charged,  or  his  agent, 
and  such  agreement,  if  made  by  the  agent  of  the  party  sought 
to  be  charged,  is  invalid  unless  the  authority  of  the  agent  is  in 
writing  subscribed  by  the  party  sought  to  be  charged.  Thus,  a 
contract  cannot  be  enforced  against  the  vendee  unless  the  instru- 
ment is  subscribed  by  the  vendee,  or  by  an  agent  authorized  by 
him  in  writing.  Many  instances  occur  where  the  seller  gives  to 
the  buyer  a  receipt  for  a  small  part  of  the  purchase  price,  balance 
of  the  purchase  price  to  be  paid  at  a  certain  time.  This,  if  signed 
by  the  seller,  or  by  his  agent  authorized  in  writing,  might  be  held 
to  be  a  sufficient  writing  to  satisfy  the  statute  so  far  as  the  buyer 
is  concerned,  and  if  he  tender  the  balance  of  the  purchase  price 
he  can  compel  a  conveyance ;  but  not  so  as  concerns  an  action 
against  the  buyer  to  compel  him  to  take  the  property  if  he  has 
not  subscribed  the  writing  either  himself  or  by  his  agent  author- 
ized in  writing  so  to  do.  Such  a  receipt  is  a  poor  thing  even  for 
the  buyer  as  usually  it  does  not  contain  covenants  as  to  war- 
ranty of  title,  and  while  the  law  imposes  upon  the  seller  the  im- 
plied contract  that  he  will  execute  and  deliver  a  good  and  suffi- 
cient deed  upon   payment  by   the  buyer,   it   does   not  necessarily 

follow  that  he  must  convey  an  unincumbered  title. 

118 


In  buying  or  selling  land  on  contract  see  to  it  and  insist  up- 
on it,  that  the  contract  be  in  writing,  subscribed  by  all  parties  or 
by  their  agents.  See  to  it  if  the  contract  be  signed  by  an  agent 
that  he  exhibit  his  written  authority  from  the  principal. 

An  agreement  authorizing  or  employing  an  agent  or  broker 
to  purchase  or  sell  real  estate  for  compensation,  or  a  commission, 
must  be  in  writing.  It  is  important  if  you  are  taking  such  an 
agreement  to  specify  fully  therein  your  authority  to  sell  the  land,  and 
to  enter  into  contracts  therefor  in  your  principal's  name.  Re- 
member that  you  cannot  recover  your  compensation,  or  commis- 
sion from  the  seller,  even  if  he  complete  the  transaction  and  re- 
ceive the  purchase  price  unless  your  contract  with  him  be  in 
writing.  The  essentials  of  such  contracts  will  be  more  fully 
dealt  with  under  the  subject  of  Agency.  Contracts  between 
brokers  or  agents  as  to  a  division  of  compensation  or  commission, 
are  not  required  to  be  in  writing. 

See  to  it  that  in  buying  or  selling  land  that  all  the  matters  of 
agreement  are  contained  in  the  written  contract  for,  when  the 
parties  have  reduced  their  agreements  to  writing,  they  cannot  be 
varied  by  other  agreements  outside  of  the  instrument.  The 
terms  of  the  written  contract  can  only  be  varied  by  another  writ- 
ten instrument  executed  by  the  parties  to  the  original  agreement, 
or  their  successors  in  interest.  The  execution  of  a  contract  in 
writing,  w^hether  the  law  requires  it  to  be  in  writing  or  not,  su- 
persedes all  the  negotiations  or  stipulations  concerning  its  matter 
which  preceded  or  accompanied  the  execution  of  the  instrument. 
Often  a  tract  of  land  is  subdivided  and  placed  in  the  hands  of 
agents  for  sale.  It  is  common  knowledge  that  this  is  constantly 
done  in  this  community.  The  property  is  advertised  and  "boomed." 
Salesmen  are  employed  by  the  owner  or  his  agent  to  induce  peo- 
ple to  buy.  These  agents  very  naturally  have  no  interest  be- 
yond the  receiving  of  their  commissions.  In  their  zeal  in  this 
behalf  they  are  frequently  led  into  misrepresentation  as  to  char- 
acter of  improvements  to  be  made,  or  the  effect  of  restrictions 
placed  upon  the  use  of  property  and  the  like.  The  writer  has 
known  instances  where  the  salesman,  without  authority  from  the 
owner  or  his  agent,  has  represented  to  buyers  that  streets  are  to 
be  improved  in  certain  ways,  and  water  and  gas  mains  laid, 
when  these  things  were  not  contemplated  by  the  owner.  Again, 
I  have  known  of  representations  made  to  a  buyer  that  certain  re- 
strictions were  to  be  imposed  upon  the  whole  tract  which  will  be 
valid  and  binding.  This,  if  the  intending  purchaser  desires  such 
restrictions.      To   one   who   objects   to   the   restrictions    the   same 

119 


salesman  has  been  known  to  declare  that  the  restrictions  if  im- 
posed will  not  be  binding.  Not  in  many  instances  does  the  buyer 
deal  directly  with  the  owner.  Naturally  he  relies  upon  the  rep- 
resentations made  by  the  agent  or  salesman  and  is  not  careful  to 
see  that  these  promises  and  agreements  are  carried  into  the  writ- 
ten contract.  When  they  are  not,  troubles  and  disputes  invari- 
ably follow ;  the  buyer  attempting  to  rescind  because  the  prom- 
ises have  failed,  and  the  seller  insisting  upon  the  terms  of  the 
contract  as  written  for  the  reason  that  he  never  authorized  such 
promises.  If  you  are  the  buyer,  see  to  it  that  all  promises,  agree- 
ments, and  inducements  are  written  in  the  contract.  If  you  are 
the  seller,  insert  words  to  the  effect  that  you  are  not  bound  by 
any  promises,  inducements,  representations,  or  agreements  not 
set  forth  in  the  instrument  which  you  execute. 

Care  should  be  taken  in  the  preparation  of  such  instruments 
that  they  may  disclose  in  plain  unmistakable  terms  the  intent  of 
the  parties.  The  multiplying  of  words  should  be  avoided.  The 
simplest  form  is  the  best.  When  A  and  B  who  are  competent  to 
contract,  for  a  lawful  consideration,  agree  that  A  will  sell  on 
certain  terms  and  B  will  buy  on  those  terms,  and  the  use  to  which 
B  proposes  to  put  the  land  be  lawful,  the  contract  is  complete 
when  they  have  signed  a  written  instrument  to  that  effect.  A  is 
then  bound  to  convey  when  B  pays  the  consideration.  The  law 
imposes  on  A  the  obligation  to  convey  and  B  to  pay,  and  accept 
the  conveyance.  Upon  B's  failure  to  pay,  A  is  relieved  from  his 
obligation  to  convey.  If  A  cannot  deliver  the  title,  B  is  relieved 
from  his  obligation  to  pay  and  may  recover  anything  he  may  have 
paid  with  damages.  These  legal  rights  and  remedies  flow  from 
the  very  act  of  the  parties  and  it  is  not  essential  to  the  validity 
of  the  written  contract  that  they  be  set  forth.  The  multiplying  of 
words  then,  seeking  to  define  the  respective  rights  and  remedies 
of  the  parties,  is  superfluous  and  dangerous.  Any  special  agree- 
ments or  covenants  must  of  course  be  set  forth  in  the  instrument 
but  I  point  out  that  it  is  not  necessary  nor  advisable  to  undertake 
to  define  the  rights  and  remedies  given  to  the  parties  under  these 
covenants  which  the  law  itself  gives. 

These  special  agreements  should  appear  in  simple,  direct  lan- 
guage, the  meaning  of  which  cannot  be  questioned,  and  any  matter 
of  agreement  having  been  once  so  stated  it  is  not  necessary  nor  ad- 
visable to  repeat  it  in  another  form. 

A  contract  must  be  so  interpreted  as  to  give  effect  to  the  mu- 
tual intention  of  the  parties  as  it  existed  at  the  time  of  contract- 
ing so  far  as  the  same  is  ascertained  or  lawful,  and  in  ascertain- 
ing the  intent  of  the  parties  the  language  of  the  contract  is  to 

120 


govern  its  interpretation  if  the  language  is  clear  and  explicit  and 
does  not  involve  an  absurdity.  A  contract  must  receive  such  an 
interpretation  as  will  make  it  lawful,  operative,  definite  and  ca- 
pable of  being  carried  into  effect,  if  it  can  be  done  without  vio- 
lating the  intention  of  the  parties,  and  the  whole  of  the  contract 
is  to  be  taken  together  so  as  to  give  effect  to  every  part,  if  rea- 
sonably practicable,  each  clause  helping  to  interpret  the  other. 
We  speak  now  of  the  intent  of  the  parties  to  be  ascer- 
tained from  the  language  of  the  instrument  itself.  Courts  may 
take  evidence  of  facts  and  circumstances  outside  of  the  instru- 
ment to  determine  the  circumstances  under  which  it  was  made 
and  the  matter  to  which  it  relates  and  construe  the  contract  ac- 
cordingly, but  without  such  judicial  construction  the  individual 
called  upon  to  construe  the  contract  cannot  do  this  except  at  his 
own  risk.  He  must  determine  the  intention  of  the  parties  as  he 
finds  it  expressed  in  the  contract.  These  rules  apply  when 
through  fraud,  mistake,  or  accident,  a  written  agreement  fails  to 
express  the  real  intention  of  the  parties. 

However  broad  may  be  the  terms  of  a  contract,  it  extends 
only  to  those  things  concerning  which  it  appears  that  the  parties 
intended  to  contract  and  the  particular  clauses  of  a  contract  are 
subordinate  to  its  general  intent,  therefore  any  repugnancy  in  a 
contract  must  be  reconciled  if  possible  by  such  an  interpretation 
as  will  give  some  effect  to  the  repugnant  clauses,  unless  they  de- 
note an  absurdity,  subordinate  however,  to  the  general  intent  and 
purpose  of  the  whole  contract.  In  short  the  instrument  must  be 
considered  as  a  whole — read  from  the  four  corners —  and  the  gen- 
eral intent  and  purpose  of  the  contract  must  prevail.  Words 
w^hich  are  wholly  inconsistent  with  the  nature  of  the  contract,  or 
with  the  main  intent  of  the  parties  are  to  be  rejected,  but  effect 
must  be  given  to  every  word  if  possible  in  order  to  ascertain  the 
true  intent  of  the  parties.  In  cases  of  uncertainty  which  cannot 
be  removed  by  these  rules,  the  language  of  the  contract  must  be 
construed  most  strongly  against  the  party  who  caused  the  uncer- 
tainty to  exist.  The  one  who  makes  the  promise  is  presumed  to 
be  such  a  party ;  except  in  a  contract  between  a  public  officer  or 
body,  as  such,  and  a  private  party,  in  which  case  the  presump- 
tion is  that  all  uncertainty  was  caused  by  the  private  party. 
Where  a  contract  is  partly  written  and  partly  printed,  or  where 
part  of  it  is  written  or  printed  under  the  special  direction  of  the 
parties,  and  with  a  special  view  to  their  intention,  and  the  re- 
mainder is  copied  from  a  form  originally  prepared  without  spe- 
cial reference  to  the  particular  parties,  and  the  particular  con- 
tract in  question,  the  written  parts  control  the  printed  parts,  and 

121 


the  parts  which  are  purely  original  control  those  which  are  cop- 
ied from  a  form.  If  the  two  are  absolutely  repugnant,  the  latter 
must  be  so  far  disregarded.  If  the  contract  is  silent  on  the 
point,  all  stipulations  and  agreements  which  are  necessary  to 
make  a  contract  reasonable  are  implied  and  imposed  by  the  law. 
All  things  that  are  in  law  implied  and  considered  incidental  to  a 
contract  or  as  necessary  to  carry  it  into  efifect  are  implied  by  the 
very  act  of  the  parties  in  contracting  unless  they  are  expressly 
excluded  in  terms  in  the  contract. 

The  distinction  between  an  option  to  purchase  land  and  an 
agreement  for  its  sale  and  purchase  is  this.  In  the  first  instance 
the  owner  may  obligate  himself  to  sell  his  property  upon  certain 
terms,  while  there  is  no  reciprocal  obligation  on  the  other  party 
to  purchase.  It  is  a  mere  privilege  which  he  acquires  by  the 
promises  of  the  seller  which  he  can  exercise  or  not  as  he  sees 
fit.  When  the  seller  has  given  an  option  to  a  buyer,  he  has  ex- 
tended to  him  a  privilege  only,  and  he  cannot  compel  the  holder 
of  that  privilege  to  buy,  for  there  is  no  promise  on  the  part  of  the 
buyer  to  complete  the  purchase.  There  being  no  promise  on  the 
part  of  the  grantee  of  the  option  to  complete  the  bargain,  there 
must  be  a  consideration  paid  for  the  privilege,  otherwise  it  is  of 
no  value.  A  naked  promise  without  a  consideration  is  void  in 
law.  What  consideration  should  be  paid  for  an  option  is  a  matter 
to  be  governed  wholly  by  circumstances.  Courts  will  not  inquire 
into  the  value  a  property  owner  sets  upon  the  privilege  he  has 
granted.  He  is  entitled  to  act  in  such  matters  on  his  own  judg- 
ment. If  I  grant  an  option  on  my  property  worth  $50,000  for  a 
period  of  ninety  days  for  $1.00  or  $1,000,  the  Courts  will  not  in- 
quire into  the  reasonableness  of  the  transaction.  The  property 
is  mine.  I  am  the  best  judge  of  its  value  to  me.  I  am  the  best 
judge  of  the  probabilities  of  the  sale  being  made  within  that  time, 
and  if  I  am  satisfied  that  $1.00  is  a  sufficient  consideration  to  me 
to  extend  the  privilege  I  am  bound.  But  I  conceive  that  under 
certain  circumstances  where  the  contract  was  induced  by  fraud 
or  misrepresentation  or  was  against  good  conscience  the  courts 
would  be  prompt  to  relieve  me  if  the  consideration  moving  to 
me  was  trifling  and  not  commensurate  with  the  importance  of 
the  transaction.  In  all  cases  an  option  to  be  enforceable  must 
be  supported  by  some  consideration.  P*or  the  very  reason  that 
I,  the  grantor  of  the  option  cannot  enforce  its  exercise  by  my 
grantee,  to  make  the  option  enforceable  against  me  I  must  have 
received  some  consideration  for  my  promise.  It  is  otherwise  in 
a  contract  for  sale  and  purchase  for  here  the  prorriises  are  recip- 
rocal.    One  agrees  to  sell  and  one  agrees  to  buy.     These  recip- 

122 


rocal  obligations  constitute  a  consideration  even  though  no  money 
passes  at  the  date  of  the  contract  and  the  contract  is  enforceable 
against  either  party. 

If  the  time  for  the  exercise  of  the  option  has  been  definitely 
fixed  by  the  contract  it  must  be  exercised  within  that  time  or  the 
seller  is  relieved  from  all  obligations  to  perform,  unless  the  fault 
be  with  him.  There  being  no  reciprocal  obligations,  equity  does 
not  extend  to  him  who  has  the  option  any  indulgence  in  the  matter 
of  time,  unless  the  grantor  of  the  option  has  placed  it  beyond  the 
power  of  the  grantee  to  perform  within  the  time  limit.  It  follows 
then  that  to  secure  the  benefit  of  the  option  and  to  bind  the  grantor 
the  grantee  thereof  must  strictly  perform.  He  cannot  complain  if 
the  grantor  refuse  to  perform,  if  he  himself  be  in  default.  There 
are  certain  distinctions  here  between  an  option  to  purchase  and  a 
contract  to  purchase  which  will  be  pointed  out  later.  Suffice  it  to 
say  here,  that  a  grantee  under  an  option,  obtains  by  his  contract  no 
interest  in  the  land  until  he  exercise  the  option  and  comply  with 
the  terms  of  his  offer,  while  under  an  agreement  for  sale  or  purchase, 
the  purchaser  acquires  at  once  the  full  equitable  title  to  the  land, 
leaving  but  the  bare  legal  title  in  the  seller,  and  when  he  has  paid 
the  full  purchase  price  the  seller  holds  this  legal  title  in  trust  for 
the  buyer.  He  acquires  this  equitable  title  at  once,  whether  he  has 
made  any  payments  or  not  upon  the  execution  of  the  contract  and 
as  we  shall  presently  see  his  rights  are  higher  than  those  of  one 
who  has  merely  purchased  a  privilege  to  buy.  Under  options  then 
time  is  strictly  of  the  essence  of  the  contract  and  in  the  absence  of 
any  act  on  the  part  of  the  seller  which  prevents  its  exercise,  the 
grantee  of  the  option  must  exercise  this  privilege  within  the  time 
limit  or  lose  the  right.  He  is  granted  no  indulgences.  His  right  to 
purchase  is  measured  strictly  by  the  terms  of  the  grant  and  equity 
will  not  enlarge  it,  if  the  grantor  be  not  at  fault. 

It  is  usual  to  insert  in  a  contract  of  sale  and  purchase  that  time 
is  of  the  essence  of  the  contract.  This  means  that  the  payments 
must  be  made  when  due  or  the  contract  may  be  forfeited.  This 
provision  is  for  the  benefit  of  the  seller  and  may  be  waived  by  him. 
Where  time  is  not  made  expressly  of  the  essence  of  the  agreement 
the  buyer  has  a  reasonable  time  after  the  due  date  of  purchase 
price  to  make  payment.  Where  the  seller  has  in  any  instance 
accepted  payment  of  any  installment  after  its  due  date  he  is  deemed 
to  have  waived  the  privilege  given  him  by  the  stipulation  that  time 
is  of  the  essence  of  the  agreement,  and,  if  he  again  desires  this 
privilege,  he  must  notify  the  purchaser  that  thereafter  the  payments 
must  be  made  when  due,  and  that  he  will  not  accept  any  payments 
after  their  due  date.    This  frequently  happens.    A  sells  to  B  upon 

123 


monthly  installments  payable  on  the  first  day  of  each  month. 
Time  is  declared  to  be  of  the  essence  of  the  agreement.  B  makes 
payments  and  A  accepts  them  at  any  time.  Sometimes  B  pays 
during  the  month ;  perhaps  he  runs  along  two  or  three  months 
without  making  any  payments.  Then  A  accepts  all  arrears.  Pres- 
ently B  ceases  making  payments  for  a  considerable  period.  A  can- 
not declare  his  contract  forfeited  until  he  has  given  B  notice  to  pay 
all  arrearages,  and  that  thereafter  all  payments  must  be  made 
strictly  on  the  due  date.  If  upon  notice  B  pay  up,  and  he  has  this 
right,  the  right  of  forfeiture  in  A  is  gone  until  B  be  again  in 
default,  and  after  notice  to  him  that  no  more  indulgence  will  be 
granted.  Care  should  be  taken  by  the  seller  to  give  the  buyer  an 
opportunity  to  pay  up  arrearages  before  forfeiture  is  declared,  other- 
wise the  buyer  may  within  a  reasonable  time  after  such  declara- 
tion make,  tender  and  compel  a  conveyance  to  him,  and  this  against 
any  grantee  who  may  have  purchased  from  the  seller  with  notice 
of  the  contract. 

Where  time  is  expressly  made  of  the  essence  of  the  contract, 
the  seller  upon  forfeiture  is  entitled  to  retain  all  monies  theretofore 
paid  to  him  on  account  of  the  purchase  price. 

Every  contract  by  which  the  amount  of  damage  to  be  paid,  or 
other  compensation  to  be  made  for  the  breach  of  an  obligation  is 
determined  in  anticipation  thereof,  is  to  that  extent  void,  except 
that  the  parties  may  agree  in  the  contract  upon  an  amount  of 
damage  sustained  by  a  breach  thereof  when  from  the  nature  of  the 
case  it  would  be  impracticable  or  extremely  difficult  to  fix  the  actual 
damage.  It  is  not  often  attempted  to  stipulate  in  the  ordinary  con- 
tract of  bargain  and  sale  for  so  called  "liquidated  damages ;"  that  is 
to  say  for  a  certain  fixed  sum  which  shall  be  forfeited  to  the  seller 
if  the  buyer  fails  to  perform.  Ordinarily  the  only  penalty  imposed 
is  the  forfeiture  of  all  monies  theretofore  paid  to  the  seller.  There 
are  instances  where  such  an  agreement  as  to  liquidated  damages 
would  be  enforced.  We  will  take  a  case  where  the  contract  is 
entered  into  without  any  payments  being  made  to  the  seller.  The 
buyer  agrees  to  put  the  land  to  certain  uses  and  the  enterprise  is 
uncertain  and  hazardous.  It  is  perfectly  legal  to  agree  upon  a  sum 
which  shall  be  the  amount  of  damage  suffered  by  the  seller  in  case 
the  enterprise  fails  and  the  buyer  fails  to  perform,  which  shall  be 
forfeited  to  the  seller,  but  where  the  actual  damage  is  certain  of 
ascertainment  the  law  will  not  enforce  the  forfeiture  of  a  stipulated 
sum.  The  one  damaged  can  recover  only  the  actual  damage  suffered. 
It  is  a  common  practice  for  parties  to  agree  upon  a  sale  and  pur- 
chase and  place  the  preliminary  papers  with  a  third  person  pending 
the  consummation  of  the  deal.     Frequently  we  find  such  cases  as 

124 


this.  A  agrees  to  enter  into  a  contract  of  sale  and  purchase  with  B 
at  a  certain  time  provided  B  put  up,  we  will  say  $5,000.00  to  bind 
the  bargain.  This  is  done  with  the  agreement  that  unless  B  carry- 
out  the  bargain  he  shall  forfeit  this  sum.  Such  an  agreement  can- 
not be  enforced.  A  can  recover  only  his  actual  damage  despite  the 
agreement  for  forfeiture.  Whenever  by  the  terms  of  an  obligation, 
a  party  thereto  incurs  a  forfeiture  by  reason  of  his  failure  to  comply 
with  its  provisions,  he  may  be  relieved  therefrom  upon  making  full 
compensation  to  the  other  party  except  in  a  case  of  a  grossly  negli- 
gent, wilful,  or  fraudulent  breach  of  duty,  and  on  the  breach  of  a 
contract  the  measure  of  damages  is  the  amount  which  will  compen- 
sate the  party  aggrieved  for  all  the  detriment  proximately  caused 
thereby  or  which  in  the  ordinary  course  of  things  would  be  likely 
to  result  therefrom.  Thus  where  the  seller  is  unable  to  convey  the 
land  he  has  agreed  to  convey,  even  if  he  has  agreed  to  pay  a  certain 
sum  as  liquidated  damages,  he  is  held  to  be  liable  only  in  actual 
damages. 

The  agreement  for  the  payment  of  liquidated  damages  gives 
way  to  the  following  rule :  The  damage  suffered  by  the  buyer  in 
such  a  case  is  deemed  to  be  the  price  paid  and  the  expenses  properly 
incurred  in  examining  the  title  and  preparing  the  necessary  papers 
with  interest  thereon ;  but  adding  thereto  in  cases  of  bad  faith,  the 
difference  between  the  price  agreed  to  be  paid  and  the  value  of  the 
estate  agreed  to  be  conveyed  at  the  time  of  the  breach  of  contract 
and  all  expenses  properly  incurred  in  preparing  to  enter  upon  the 
land.  The  damage  caused  by  a  breach  on  the  part  of  the  buyer  is 
deemed  to  be  the  excess,  if  any,  of  the  amount  which  the  buyer 
has  agreed  to  pay  under  his  contract,  over  the  value  of  the  property 
to  the  seller.  This  value  to  the  seller  of  course  must  be  established 
by  evidence.  It  does  not  rest  in  his  judgment.  Thus  if  B  agree  to 
buy  the  property  for  $10,000  and  fail  to  carry  out  the  contract,  and 
at  the  time  of  his  breach  of  this  contract  the  value  of  the  property 
to  the  seller  is  but  $8,000,  A  has  his  right  of  action  against  B  for 
$2,000.  These  remedies  must  not  be  confused  with  the  other  reme- 
dies of  the  respective  parties  to  a  contract.  Damages  upon  breach 
can  only  be  recovered  when  the  party  claiming  them  is  not  himself 
in  fault,  and  the  other  party  has  placed  himself  in  a  position  pre- 
venting performance  by  him  or  refuses  to  carry  out  his  contract. 
Thus  if  I  agree  to  sell  certain  property  to  you  and  afterward  I 
convey  the  property  to  one  who  has  no  notice  of  my  contract  with 
you,  for  a  valuable  consideration,  you  cannot  compel  specific  per- 
formance of  the  contract;  that  is  to  say,  you  cannot  compel  a  con- 
veyance of  the  land  to  you,  but  you  can  recover  damages  from  me 
to  the  amount  which  you  have  paid  me  on  account  of  the  purchase 

125 


price  and  any  expenditures  you  may  have  legitimately  made  in  and 
about  the  transaction  with  interest.  If  you  as  buyer  commit  the 
breach,  I,  as  seller,  have  several  rights  and  remedies,  as  I  shall 
show  later. 

It  is  encumbent  upon  the  buyer  that  he  be  ready  and  willing 
and  able  to  make  his  payments  before  he  can  place  the  seller  in 
default.  Thus  if  the  seller  still  own  the  land  when  the  buyer  is 
ready  to  pay,  the  buyer  must  make  tender  of  the  money  due  before 
he  has  a  right  of  action  against  the  seller.  He  must  make  the  tender 
in  good  faith  and  keep  it  good.  This  he  is  not  required  to  do  if 
the  seller  has  placed  himself  in  such  a  position  that  he  cannot  con- 
vey. The  law  requires  no  idle  act.  The  grantee  of  an  option  to 
purchase  is  required  to  make  a  tender  of  the  purchase  price  before 
he  can  enforce  a  performance,  for  until  he  has  paid  or  offered  to 
pay,  there  is  no  mutuality  of  agreement.  The  seller  under  a  con- 
tract of  sale  and  purchase  must  in  certain  instances  tender  a  deed 
to  the  buyer  before  he  can  maintain  an  action  to  forfeit  or  foreclose 
the  interest  of  the  buyer  or  compel  the  buyer  to  perform.  Thus 
where  the  contract  provides  that  upon  default  in  payment  of  any 
installment  of  the  purchase  price  the  whole  amount  of  the  purchase 
price  shall  become  due  and  payable  at  the  option  of  the  seller,  the 
buyer  is  entitled  to  notice  of  the  exercise  of  this  option  and  the 
seller  must  before  the  buyer  is  put  in  default  notify  him  of  this 
election  and  tender  him  a  deed  and  demand  payment  of  the  whole 
sum.  In  cases  where  the  last  installment  of  the  purchase  price  is 
due  and  unpaid  the  seller  must  tender  a  deed  before  he  can  maintain 
his  action.  In  cases  where  time  is  not  expressly  made  of  the 
essence  of  the  contract,  and  default  is  made  in  any  payment,  the 
seller  must  demand  payment  and  give  a  reasonable  length  of  time 
to  the  buyer  to  pay  before  he  can  forfeit  the  contract  or  take  any 
action  thereon.  He  is  not  obliged  to  tender  a  deed  unless,  as  I  have 
said,  the  contract  gives  him  the  option  to  declare  all  payments  due 
and  he  exercises  that  option.  The  buyer,  if  payment  is  not  de- 
manded of  him  and  he  be  given  a  reasonable  time  to  make  payment, 
may  after  forfeiture  is  declared,  or  suit  begun  to  foreclose,  make 
tender  within  a  reasonable  time  after  the  installment  is  due  and  be 
reinstated.  What  is  a  reasonable  time  will  always  be  determined 
by  the  Courts  from  the  particular  circumstances  of  the  case. 

Where  the  contract  recites  that  time  is  of  the  essence  thereof 
this  implies  that  the  payments  are  to  be  made  on  the  due  date  and 
not  later.  If  they  are  not  so  made  and  the  seller  has  granted  no 
indulgences  he  need  not  make  a  tender  of  deed  before  declaring 
forfeiture,  or  beginning  his  action  for  foreclosure  or  specific  per- 
formance or  damages,  nor  need  he  give  any  notice,  unless  the  con- 

126 


Vendor    ■&  Vendee. 
WAIVER  OF  FORFEITURE— Revivor   of   Right. 

de  Bairos  v.    Bariin,  _<'ai. ,    59  Cai  .De<i.570;  1?20— 

on  Petn.   for  Heririri;^  ai'ter  Jud,^;  ent  Cai.Api>. ^ 

51    C.A.D.    T)';. 


"AcGOi^tance  of  overdue  i<ac;wKKka  in3tai -merits  of  the  ^irice, 
on  an  execijtory  contract  for  tr©    :ale  of  la.d,   waives  any 
right  to   declare  a  forf eiiture  on  account  of  the  .^.-evioua 
failures  to  p^.y      )  en  due.        ^i/T    '■  CH  AOCEPTAHCE^DOEB  NOT 
CHANGE  THE  TERMS  of  the  contract  aa  to  forfeiture  for 
FUTURE  FAILURES;    nOr   eili^iinate  t}.o     roviaion  thnt   tine   is 
of  the  'jsssnce  of  the  contract. 

There  may   be  coRduct  and  aC4Uiei=^nce  by  the   vendor   suf- 
ficient to  .justify   the  inference  by  a  co-urt  as  a  matter 
of  fact  ViB.t  the  ve.dor   hs  waived   the  conditions  of  a 
contract  ragardin^;  a  forvfeiture,   which  he  aftorward  claims 
the  ri^^ht  to   enforce,   and  when   in   such  a  case  the  waiver 
has  continued  until  after  nli   inatalimcnts  3 re  due,   the 
condition  cannot  be  revived  exco-^t  by  notice  to  the 
vendee.      (B.-ne  v    "■?  yieton^    1*5'  Cal     ?'"^S;      Stevenson  v. 
Joy^    -[A  Cal.    2'';;      -oyt  v  3entei,    !;>'+  Cal.    6 '4;      A  erican 
rtc  Co.   v.    -n.txer,    i6>  Cal.   5n-j     Myers  v  V/il.iama,    175 

Cal.  ^oh.)      lU's:  mm  o?  these  gases  holds  that  such 

V/AIVEr;    Is'AiiSOLUTS,    OR  Tmr  TJiE  PROVISION  CANNOT  BE  RE- 
VIVED AI-JD  A   FORFEIT'JRE  PRODUCED  3X  A  NOTICE  REQUIRING 
PERFjR  .Ai\GE  ffLWm   -REASONABLE  TlfiE." 


t:^ 


1 


tract  by  its  terms  requires  notice.  The  tender  must  be  made  by 
either  party  or  by  some  person  on  his  behalf  and  with  his  assent. 
In  the  absence  of  any  agreement  to  the  contrary  the  tender  may  be 
made  at  any  place  where  the  person  sought  to  be  bound  thereby 
may  be  found,  and  if  he  cannot  with  reasonable  diligence  be  found 
within  the  State  and  within  a  reasonable  distance  from  his  residence 
or  place  of  business,  or  if  he  evades  the  party  seeking  to  make  the 
tender,  then  at  his  residence  or  place  of  business.  The  tender  must 
be  made  in  good  faith  and  must  be  free  of  conditions  which  the  one 
sought  to  be  bound  is  not  bound  to  perform.  The  tender  is  of  no 
effect  if  the  one  making  it  is  not  able  and  willing  to  perform.  It  is 
not  necessary  to  produce  the  deed  or  money  unless  the  tender  be 
accepted.  If  the  one  to  whom  tender  is  made  makes  no  objections, 
if  he  be  given  the  opportunity  and  these  objections  could  be  obvi- 
ated by  the  one  making  the  tender,  and  he  fail  to  advance  them,  he 
is  deemed  to  have  waived  such  objections. 

The  seller  cannot  sue  for  the  purchase  price  independently  of 
his  action  to  foreclose  or  for  specific  performance,  and  then  he 
cannot  recover  unless  he  can  comply  with  the  contract  and  deliver 
the  land.  The  seller  cannot  forfeit  the  contract,  retain  what  money 
he  has  received  and  recover  the  balance  of  the  purchase  price. 

Oftentimes  notes  are  given  for  installments  of  the  purchase 
price  in  addition  to  the  obligation  to  pay  contained  in  the  contract. 
This  is  an  unsafe  practice  for  the  buyer  unless  the  notes  recite  on 
their  face  that  they  are  given  for  such  purpose.  Reference  should 
be  made  in  the  note  to  the  contract,  for  if  this  be  not  made  to 
appear,  and  the  note  be  negotiable  in  form,  the  seller  may  sell  them 
to  another  and  if  the  purchaser  take  before  maturity  without  notice 
of  the  contract,  the  buyer  is  bound,  whether  the  seller  complies 
with  the  contract  or  not.  Do  not  sign  any  notes  for  the  purchase 
price  unless  it  appear  that  they  are  to  evidence  the  payments  to  be 
made  under  your  contract. 

We  now  come  to  consider  the  precautions  to  be  exercised  by  ' -^  /-r» 

the  buyer,  when  he  purchases  under  a  contract.  First,  he  must 
know  that  the  one  from  whom  he  purchases  has  capacity  to  con- 
tract and  is  the  owner  of  the  property,  and  the  condition  of  the 
title  as  to  encumbrances.  Many,  many  people  have  suffered  loss 
by  failure  to  do  this.  If  upon  the  title  being  exhibited  the  buyer 
finds  it  encumbered  by  a  mortgage,  to  save  himself  in  law  he  must 
see  to  it  by  stipulation  with  the  seller  that  he  may  apply  his  pay- 
ments toward  the  mortgage.  The  mortgagee  is  not  bound  to  take 
any  notice  of  the  contract,  and  the  buyer  must  depend  upon  the 
integrity  of  the  seller  unless  he  protect  himself  by  agreement  that 
he  himself  may  pay  the  mortgage  and  receive  corresponding  credits 

127 


on  the  purchase  price.  If  the  buyer  does  not  go  into  possession  of 
the  property  he  should  record  his  contract,  that  every  one  subse- 
quently dealing  with  the  land  may  have  notice  of  his  rights.  If  in 
possession,  he  need  not  record  it,  as  possession  is  the  highest  form 
of  notice.  When  the  buyer  has  thus  given  notice,  any  mortgagee 
loaning  money  to  the  seller  thereafter  takes  subject  to  the  rights  of 
the  contract  holder,  and  unless  he  deal  with  him,  runs  the  risk  of 
losing  his  money.  When  the  contract  holder  seeks  to  enforce 
specific  performance  he  can  show  payment  to  the  seller  and  the 
mortgagee  who  has  taken  subject  to  his  rights  cannot  enforce  his 
lien  against  him. 

If  the  property  be  the  homestead  of  the  seller,  and  the  seller 
be  married,  the  contract  must  be  executed  by  both  spouses  person- 
ally. The  execution  by  an  agent  or  attorney  in  fact  is  not  binding. 
If,  after  the  contract  be  entered  into  a  homestead  be  filed,  it  does 
not  defeat  the  contract.  The  homestead  right  is  deemed  to  be  sub- 
ject to  the  buyer's  rights.  It  often  occurs  that  after  a  man  enters 
into  a  contract  to  convey  the  community  property  or  his  separate 
property,  that  his  wife,  at  the  instance  of  her  husband,  who  desires 
to  repudiate  his  bargain,  or  upon  her  own  volition,  seeking  to  pre- 
vent a  conveyance,  files  a  declaration  of  homestead.  This  does  not 
prejudice  the  rights  of  the  buyer,  as  upon  performance  on  his  part 
he  may  compel  conveyance  by  both  spouses,  and  should  they 
refuse  the  Court  will  appoint  a  commissioner  to  convey  for  them. 

Now,  as  to  the  rights  and  remedies  of  the  parties  upon  breach 
of  the  contract.  It  is  important  to  observe  that  no  Court  will 
enforce  a  specific  performance  of  a  contract  which  is  not  fair  and 
equitable  and  which  is  not  supported  by  an  adequate  consideration, 
nor  will  any  Court  grant  relief  to  one  who  does  not  come  into  Court 
with  .clean  hands.  Here  again  stands  out  the  maxim,  '^He  who 
seeks  equity  must  do  equity."  I  have  touched  before  upon  the 
danger  of  inserting  stipulations  in  the  contract  which  are  drastic 
in  their  operation  and  oppressive  upon  the  buyer.  It  must  be 
remembered  that  the  buyer,  when  he  has  made  any  payment,  is  the 
owner  of  the  full  equitable  title ;  he  is  entitled  to  the  possession,  and 
the  seller  is  the  owner  of  the  purchase  price,  and  when  it  is  all  paid 
to  him  or  tendered  to  him,  equity  adjudges  the  buyer  to  be  the 
owner  of  the  land  and  the  seller  the  owner  of  the  bare  legal  title  in 
trust  for  the  buyer.  It  is  true  that  many  times  irresponsible  and 
dishonest  persons  will  enter  into  contracts  to  purchase  without  the 
ability  or  intent  to  carry  out  their  contract  and  cause  annoyance 
and  expense  to  the  seller  to  oust  them  from  the  premises,  but  there 
is  a  duty  resting  upon  the  seller  to  ascertain  with  whom  he  is 
dealing  and  govern  himself  accordingly. 

128 


The  cautions  I  have  given  are  of  interest  to  the  seller  when 
he  comes  to  forfeit  the  contract,  or  when  he  seek  to  foreclose  it,  or 
compel  performance.  A  court  of  law  will  scan  the  contract  very 
closely  before  it  declares  a  forfeiture  to  see  that  no  undue  advantage 
is  being  taken.  Courts  are  hostile  to  forfeitures.  Courts  of  equity 
which  never  declare  forfeitures  will,  when  the  action  is  brought 
to  foreclose  the  contract  or  compel  specific  performance,  look  to  the 
consciences  of  the  parties  and  not  to  the  letter  of  the  law,  and  if  it 
be  found  that  the  stipulations  are  unjust,  unfair,  oppressive  and 
against  good  conscience,  will  refuse  to  give  them  effect.  A  plaintiff 
who  exhibits  a  contract  wherein  the  stipulations  are  substantially 
all  in  his  favor  finds  a  hostile  Court. 

These  are  the  rights  of  a  buyer  under  a  contract  of  sale  and 
purchase.  To  rescind  or  sue  for  damages  as  above  stated,  or  to 
compel  specific  performance.  These  are  the  rights  of  the  seller: 
To  rescind,  to  sue  for  damages  as  above  stated,  declare  a  forfeiture, 
to  foreclose  in  an  equitable  action,  or  to  compel  specific  perform- 
ance. Recission,  which  means  the  abrogation  of  the  contract  and 
the  placing  of  the  parties  in  the  same  position  as  before  the  execu- 
tion of  the  contract,  may  be  accomplished  as  follows :  By  one  over 
the  age  of  eighteen  years  upon  his  attaining  majority,  or  within  a 
reasonable  time  thereafter,  or  in  case  of  his  death  within  the  period 
by  his  heirs  or  personal  representatives,  upon  restoration  of  the 
purchase  price  if  the  minor  be  the  seller,  or,  surrender  of  the  land, 
if  he  be  the  buyer.  Bear  in  mind  all  the  time  that  a  minor  under  the 
age  of  18  years  can  make  no  binding  contract  and  need  make  no 
restoration  if  he  or  she  desires  to  repudiate  the  bargain.  He  or  she 
is  not  required  even  to  signify  such  a  desire.  Such  a  contract  is 
void  and  one  who  deals  with  a  woman  before  she  arrive  at  the  full 
age  of  IS-years  or  a  boy  under  the  age  of  18  years  runs  the  risk  of 
losing  both  the  land  and  his  money.  If  he  deal  with  a  boy  between 
the  age  of  18  and  21  he  runs  the  risk  of  the  rescission  of  his  con- 
tract when  the  minor  becomes  of  full  age,  or  within  a  reasonable 
time  thereafter,  or  if  he  die  within  the  period,  by  his  heirs  or  legal 
representatives.  Such  a  contract  made  by  one  of  unsound  mind, 
but  not  entirely  without  understanding,  made  before  his  incapacity 
has  been  judicially  determined,  may  be  rescinded  by  him  upon  his 
restoration  to  capacity. 

Any  party  to  a  contract,  who  is  competent  to  contract  is 
entitled  to  rescind  in  the  following  cases  only : 

1.  If  the  consent  of  the  party  rescinding  or  of  any  party 
jointly  contracting  with  him  was  given  by  mistake,  or  obtained 
through  duress,  menace,  fraud,  or  undue  influence  exercised  by  or 
with  the  connivance  of  the  party  as  to  whom  he  rescinds  or  of  any 
other  party  to  the  contract  jointly  interested  with  such  party. 

129 


2.  If  through  the  fault  of  the  party  as  to  whom  he  rescinds 
the  consideration  for  his  obligation  fails  in  whole  or  in  part : 

3.  If  such  consideration  becomes  entirely  void  from  any  cause: 

4.  If  such  consideration,  before  it  is  rendered  to  him  fails  in  a 
material  respect  from  any  cause ;  or 

5.  By  consent  of  all  other  parties. 

Any  stipulation  in  the  contract  that  the  same  shall  not  be 
rescinded  but  shall  be  compensated  in  damages  does  not  take  away 
this  right  of  rescission  for  fraud,  nor  for  mistake,  when  such  mis- 
take is  in  a  matter  essential  to  the  inducement  of  the  contract  and  is 
not  capable  of  exact  and  entire  compensation.  Rescission  when  not 
effected  by  consent  of  the  parties  can  be  accomplished  only  by  the 
use,  on  the  part  of  the  party  rescinding  of  reasonable  diligence  to 
comply  with  the  following  rules : 

1.  He  must  rescind  promptly  upon  discovering  the  facts  which 
entitle  him  to  rescind,  if  he  is  free  from  duress,  menace,  undue 
influence,  or  disability  and  is  aware  of  his  right  to  rescind ;  and 

2.  He  must  restore  to  the  other  party  everything  of  value 
which  he  has  received  from  him  under  the  contract ;  or  must  offer 
to  restore  the  same  upon  condition  that  such  party  shall  do  likewise 
unless  the  latter  is  unable  or  positively  refuses  to  do  so.  The  con- 
tract may  be  rescinded  when  it  is  unlawful  for  causes  not  apparent 
on  its  face  and  the  parties  are  not  equally  in  fault  or  when  the 
public  interest  will  be  prejudiced  by  permitting  it  to  stand.  Rescis- 
sion cannot  be  adjudged  for  mere  mistake,  unless  the  party  against 
whom  it  is  adjudged  can  be  restored  to  substantially  the  same 
position  as  if  the  contract  had  not  been  made,  and  on  adjudging  the 
rescission  of  a  contract  the  Court  may  require  the  party  to  make 
any  compensation  to  the  other  which  justice  may  require. 

When  the  buyer  has  made  his  payments  he  may  compel  a 
conveyance  from  the  seller,  or  his  assignee  with  notice  upon  refusal 
to  make  the  deed  in  an  action  for  specific  performance.  The  Court, 
if  the  buyer  be  not  in  default,  and  if  the  contract  be  fair  and  equit- 
able and  the  consideration  adequate,  will  direct  the  seller  to  convey, 
or  upon  his  failure  to  do  so,  will  appoint  a  commissioner  to  make 
deed  for  him. 

If  the  buyer  be  in  default  the  seller  has  several  rights  and  rem- 
edies in  addition  to  his  right  to  sue  for  damages  as  above  stated. 

If  time  be  made  the  essence  of  the  contract,  and  default  has 
been  made  in  any  payment  when  due,  and  no  indulgence  or  waivers 
have  been  granted  by  the  seller,  and  there  be  no  agreements  to  the 
contrary,  he  may  stand  upon  the  letter  of  his  contract  and  declare 
a  forfeiture,  without  notice  or  judicial  proceeding  of  any  kind. 
Under  such  circumstances  he  is  entitled  to  retain  all  money  there- 

130 


tofore  paid  to  him  on  account  of  the  purchase  price.  It  is  not 
necessary  to  give  notice  to  the  buyer  that  his  rights  have  been 
forfeited,  for  the  buyer  is  deemed  to  know  the  exact  terms  of  the 
contract  as  they  stood  when  made,  and  if  there  have  been  no 
changes  therein,  no  waivers  or  indulgences  he  cannot  claim  that  he 
is  entitled  to  notice  of  his  own  default.  This  is  not  true,  however, 
where  the  seller  has  accepted  payments  after  the  due  dates  and 
thus  waived  the  strict  performance  of  the  contract.  When  he  has 
once  done  this  he  must,  before  he  can  declare  a  forfeiture  or  bring 
any  action,  notify  the  buyer  that  he  must  pay  up  all  arrearages  and 
thereafter  make  payments  strictly  on  the  due  date.  If  the  buyer 
pays  up,  his  rights  are  saved,  and  he  must  thereafter  strictly  comply 
with  the  original  terms  of  the  contract  if  he  avoid  forfeiture.  If  the 
seller  does  not  again  indulge  the  buyer  and  refuses  any  further  pay- 
ments after  the  due  date,  he  again  has  the  right  of  forfeiture,  as 
originally  given  him.  This  is  a  swift  and  drastic  remedy  and  is 
most  often  employed  where  the  buyer  is  not  in  possession,  or  has 
not  recorded  his  contract.  Great  care  must  be  exercised  in  such  a 
case  that  the  buyer's  rights  are  not  infringed  and  that  he  be  given 
full  and  fair  notice.  No  particular  form  of  notice  is  required. 
Any  notice  which  a  person  of  ordinary  understanding  can  compre- 
hend is  sufficient.  Courts  are  hostile  to  forfeitures,  as  I  have  said, 
and  will  hold  the  one  seeking  the  remedy  to  the  highest  account. 

In  cases  when  the  contract  has  been  recorded  and  it  is  desired 
to  clear  the  record  of  the  apparent  cloud,  an  action  for  forfeiture 
may  be  brought  and  upon  proof  of  such  facts  as  would  warrant  a 
forfeiture  without  action,  the  Court  will  declare  the  contract  for- 
feited and  the  record  is  cleared. 

An  action  for  an  equitable  foreclosure  may  be  maintained  in 
cases  where  the  seller  has  not  grounds  for  forfeiture,  or  if  he  waive 
forfeiture,  and  it  be  desired  to  clear  the  record  and  recover  posses- 
sion. The  Court,  will  upon  a  proper  showing,  decree  that  the  buyer 
pay  up  all  arrearages  within  a  certain  time  determined  by  the  cir- 
cumstances of  the  case,  or  stand  foreclosed.  The  buyer  may  then 
pay  up  all  installments  in  arrears  and  be  reinstated.  He  would  be 
compelled  to  pay  up  the  whole  purchase  price  if  the  contract  pro- 
vided that  upon  default  in  payment  of  any  installment  the  whole 
purchase  price  should  become  due  and  that  option  had  been  exer- 
cised by  the  seller.  No  notice  of  the  exercise  of  this  option  need  be 
given  other  than  the  filing  of  the  complaint.  If  the  buyer  do  not 
pay  up,  then  a  further  decree  should  be  obtained  setting  forth  this 
fact  and  that  plaintiff  is  entitled  to  the  possession,  and  if  the  buyer 
continues  in  possession,  a  writ  of  possession  should  be  obtained 
whereby  he  will  be  dispossessed  by  the  sheriff. 

131 


An  ordinary  action  to  quiet  title  may  be  maintained  by  the 
seller,  if  it  be  desired  to  clear  the  record  or  obtain  possession. 
Upon  entry  of  such  a  decree  the  plaintiff  may  secure  the  writ  of 
possession. 

Lastly  the  seller  may  stand  upon  his  contract,  and  compel  the 
purchaser  to  complete  his  bargain,  take  the  land  and  secure  judg- 
ment for  the  purchase  price.  But  this  he  cannot  do  unless  he  tender 
a  deed  and  title  in  all  respects  as  agreed  in  the  contract  to  be 
delivered  by  him,  and  no  personal  judgment  can  be  taken  against 
any  assignee. 

No  stipulations  in  the  contract  that  upon  assignment  of  the 
same,  or  recordation  of  the  same,  that  it  shall  be  forfeited  are  of  any 
effect,  nor  is  an  agreement  that  a  declaration  of  forfeiture  filed  in  the 
office  of  the  County  Recorder  be  conclusive  evidence  of  such  for- 
feiture of  any  avail  to  the  seller,  unless  there  be  an  actual  forfeiture 
in  law  and  one  which  a  Court  would  impose.  Such  clauses  in  a 
contract  but  work  detriment  to  the  seller,  for  the  Courts  lean 
toward  the  buyer  when  forfeiture  is  sought,  and  will  search  the 
contract  for  evidence  of  oppression  or  hardship  upon  him. 

Do  not  record  your  contract  unless  you  mean  in  good  faith  to 
comply  with  it.  Do  not  record  it  merely  for  the  purpose  of  clouding 
the  title,  for  there  is  such  a  thing  as  slander  of  title,  and  the  seller 
may  hold  you  in  damage  if  he  suffer  loss  by  your  act. 

Much  confusion  exists  as  to  the  distinction  between  escrows 
and  executory  agreements.  Agreements  are  executed  when  all  is 
done  which  is  contemplated  by  the  parties.  An  executory  contract 
is  one  which  is  yet  to  be  performed  and  something  is  yet  to  be 
determined  upon  between  the  parties.  At  law  a  contract  under 
certain  circumstances,  is  deemed  to  be  executed  when  there  is 
nothing  further  to  be  done  requiring  further  consent  of  the  parties 
or  further  meeting  of  minds,  but  yet  there  remains  something  to  be 
done  to  render  effective  the  agreement  as  it  stands. 

Under  this  head  fall  escrows  and  I  shall  distinguish  between  a 
pure  escrow  at  law  which  is  an  executed  contract,  and  so-called 
escrows  where  the  agreement  is  executory. 

Section  1057  C.  C.  defines  an  escrow  as  follows : 

"A  grant  may  be  deposited  by  the  grantor  with  a  third  person, 
to  be  delivered  on  the  performance  of  a  condition  and  on  delivery 
by  the  depositary  will  take  effect.  While  in  the  possession  of  the 
third  person  and  subject  to  condition  it  is  called  an  escrow." 

The  first  point  to  observe  is  that  the  agreement  is  complete. 
The  condition  referred  to  is  one  upon  which  the  parties  have  agreed. 
The  delivery  to  the  depositary  must  be  absolute  and  complete  with 
intent  to  surrender  dominion  over  the  deed  and  with   full  intent 

132 


that  it  be  effective  when  the  condition  is  performed.  It  is  delivered 
for  the  benefit  of  the  grantee.  Any  instructions  to  the  escrow 
holder,  except  to  deliver  when  the  condition  is  performed  voids  the 
escrow.  Where  a  valid  delivery  has  been  made  in  escrow  a  delivery 
back  to  the  grantor  by  the  escrow  holder  does  not  cancel  the  deed. 
A  deed  cannot  be  delivered  in  escrow  to  the  grantee,  his  agent,  or 
attorney.  It  must  be  delivered  to  a  third  person.  Here  is  a  legal 
escrow : 

A  delivers  his  deed  to  B  to  be  delivered  to  C  upon  payment  by 
C  of  a  certain  sum  in  a  certain  time.  There  is  nothing  left  to  be 
determined.  The  contract  of  sale  and  purchase  is  executed,  save 
the  exchange  of  the  deed  for  the  money  and  when  C  pays  and  B 
delivers  the  deed  to  him  the  law  considers  the  second  delivery  to 
relate  back  to  the  first  delivery  as  if  it  had  been  simultaneous  with 
the  first.  The  reason  for  this  is  obvious.  The  transaction  being 
complete,  nothing  remaining  to  be  done  by  the  way  of  agreement, 
the  second  delivery  is  considered  the  first  to  cut  off  the  rights  of 
intervening  parties.  If  A  die  while  the  deed  is  in  escrow  yet  B  may 
make  payment  and  the  property  is  his  from  the  date  of  the  first 
delivery. 

It  is  equally  obvious  that  this  could  not  be  so  if  there  yet 
remained  anything  to  be  settled  on  upon  between  the  parties,  for  in 
such  case  the  first  delivery  could  not  be  considered  absolute.  So,  jf 
any  conditions  are  imposed  other  than  that  which  has  been  settled 
upon  at  the  time  of  the  first  delivery,  as,  should  the  grantor  say 
deliver  this  deed  to  B,  if  he  pay  you  a  certain  sum  on  or  before 
such  a  day  provided  I  acquire  title  before  that  day  satisfactory  to 
him,  or  "I  reserve  the  right  to  recall  this  deed,"  or  "Provided  B  and 
I  do  not  otherwise  agree,"  or  the  like,  there  is  no  escrow.  B  is 
simply  a  depositary  of  the  deed  and  when  C  finally  takes  over  the 
deed  the  second  delivery  does  not  relate  back  to  cut  off  intervening 
rights  of  third  parties.  If  C  pay  the  money  to  B  with  instructions 
to  pay  it  to  A  if  the  title  be  found  in  a  specified  condition,  the  same 
result  is  brought  about.  To  create  a  true  escrow  then,  the  grantor 
must  deposit  his  deed  with  a  third  person  with  full  intent  to  sur- 
render dominion  over  it  and  to  pass  title  to  his  grantee  under  condi- 
tions certain  at  the  date  of  delivery  by  him  to  the  escrow  holder  and 
which  leave  nothing  to  be  determined  by  the  parties.  Where  the 
deed  is  not  placed  in  escrow  but  is  placed  in  the  hands  of  one  with 
authority  to  deliver  when  certain  things  are  to  be  assented  to  by 
grantor  such  as  the  terms  of  a  mortgage  to  be  taken  and  the  like, 
or  when  the  grantee  deposit  his  money  conditioned  that  it  be  paid 
out  on  his  order,  or  when  the  title  can  be  shown  to  be  in  a  certain 
condition,  there  is  no  escrow  as  the  law  knows  it,  but  the  depositary 

133 


is  the  agent  of  the  parties.  This  is  the  common  business  custom  in 
this  vicinity  and  a  commendable  one.  The  transaction  is  rarely 
such  that  every  detail  of  a  sale  and  purchase  are  determined  upon 
before  the  deposit  of  papers  and  money.  While  such  agency  agree- 
ments popularly  called  "escrows"  have  not  the  legal  elements  of  an 
escrow,  they  are  of  great  convenience  and  serve  the  purpose  in 
nearly  very  particular  as  a  pure  escrow.  I  shall  touch  upon  them 
more  at  length  in  our  discussion  of  Agency. 

Analagous  to  an  escrow  is  a  transaction  where  a  grantor  deliv- 
ers a  deed  to  a  third  person  to  be  delivered  to  the  grantee  after 
death  of  the  grantor.  In  such  a  case  there  must  be  no  conditions, 
but  the  intent  must  appear  to  pass  the  title  at  once,  the  enjoyment 
thereof  to  be  postponed.  When  this  appears,  the  efifect  is  to  pass  the 
title  from  the  grantor  at  the  date  of  the  first  delivery,  leaving  in  him 
a  life  estate  only.  When  such  deeds  are  delivered,  thereafter  if  the 
land  be  sold  or  incumbered  the  deed  or  mortgage  should  be  executed 
by  both  grantor  and  grantee  under  the  first  deed.  Such  deeds  are 
often  made  and  deposited  with  intent  to  avoid  probate  proceedings. 
This  is  perfectly  lawful.  In  many  cases  several  parcels  are  included 
in  the  deed.  Some  of  these  it  is  desirable  to  sell  before  the  death 
of  the  grantor.  Then  both  grantor  and  grantee  under  the  deed 
should  join  in  any  conveyance  that  when  the  original  deed  is 
recorded  after  the  death  of  the  grantor  no  question  will  arise  as  to 
priority  of  conveyance  and  delivery. 


134 


IX. 
Mechanics'  Liens 

A  new  Mechanics'  Lien  law  went  into  effect  June  30,  1911, 
and  it  is  of  this  Act  that  I  shall  speak.  As  many  changes  were 
made  in  the  then  existing  law,  most  of  the  decisions  and  rules  laid 
down  by  the  Court  in  the  interpretation  of  the  law  as  it  formerly 
existed  are  not  pertinent  now. 

I  will  say  that  the  chief  distinction  between  the  new  law  and 
the  old  law  is,  that  under  the  present  law  the  property  is  liable 
for  the  full  amount  of  the  reasonable  value  of  the  lien,  and  is  not 
in  any  way  limited  by  the  amount  of  any  contract  price  agreed 
upon  between  the  owner  and  the  contractor.     This  was  not  true 
under  the  old  law,  where  in  all  cases  the  lien  holders  were  con- 
fined in  their  recoveries  to  the  agreed  contract  price.     That  this 
led  to  collusion  and  fraud  it  can  be  readily  seen,  for  if  the  owner 
and  contractor  were  dishonest  they  could  agree  upon  a  price  less 
than  the  actual  value  of  the  labor  and  materials  furnished.     Un- 
der the  new  law  an  owner  may  protect  himself  against  any  hens 
beyond  the  agreed  contract  price  by  filing  a  copy  of  the  building 
contract  in  the  Recorder's  Office,  and  requiring  the  contractor  to 
furnish  a  bond  with  two  sufficient  sureties,  which  shall   mure  to 
the  benefit  of  all  lien  claimants,  and  any  lien  claimant  may  look 
to  this  bond  for  any  sums  due  him  over  and  above  the  contract 
price      In  short,  a  material  man  or  laborer  is  not  concerned  with 
the  contract  price.     If  he  is  not  paid  out  of  the  agreed  sum  he 
must  be  paid  by  the  bondsmen,  or  his  sureties.     Again,  under  the 
new  law,  it  is  not  necessary  to  retain  any  part  of  the  money  or 
to  fix  periods  at  which  it  shall  be  paid.     The  full  amount  of  the 
agreed  price  could  be  paid  at  once  upon  the  signing  of  the  con- 
tract without  interfering  with  the  rights  of  lien  claimants. 

Under  the  present  law  there  is  no  distinction  or  priority  of 
liens  except  that  the  contractor  is  the  last  to  be  paid.  There 
is  no  change  in  the  law  concerning  the  rights  of  mortgage  or 
trust  deed  holders.  If  the  mortgage  or  trust  deed  is  recorded 
before  any  contract  is  made,  and  before  any  work  is  done  on  the 
premises  or  any  material  furnished  thereto,  it  takes  precedence 
over  all  'subsequent  claimants,  as  the  claimants  must  be  deemed 

135 


to  have  dealt  with  the  property  with  notice  of  the  mortgage  or 
trust  deed.  However,  if  any  labor  be  done  on  the  premises  or 
any  material  furnished  thereto,  a  trust  deed  or  mortgage  subse- 
quent to  this  is  subjected  to  all  possible  claims  arising  thereafter. 
Great  caution  should  be  exercised  therefore  in  making  loans  for 
building  purposes,  to  see  that  no  labor  has  been  done  on  the 
ground,  and  no  material  placed  thereon  at  the  time  the  mortgage 
or  trust  deed  is  recorded,  else  the  mortgage  or  trust  deed  will  be 
subject  to  all  liens  for  labor  or  material. 

I  will  set  out  in  full  the  main  portions  of  the  Act  as  they  are 
practically  self-explanatory. 

Mechanics,  material  men,  contractors,  sub-contractors,  artisans, 
architects,  machinists,  builders,  miners,  teamsters  and  draymen, 
and  all  persons  and  laborers  of  every  class  performing  labor  upon, 
or  bestowing  skill  or  other  necessary  services,  or  furnishing  mater- 
ials to  be  used  or  consumed  in,  or  furnishing  appliances,  teams  and 
power  contributing  to  the  construction,  alteration,  addition  to  or 
repair,  either  in  whole  or  in  part,  of  any  building,  wharf,  bridge, 
ditch,  flume,  aqueduct,  well,  tunnel,  fence,  machinery,  railroad, 
wagon  road  or  other  structure,  shall  have  a  lien  upon  the  property 
upon  w^hich  they  have  bestowed  labor  or  furnished  materials,  for 
the  value  of  such  labor  done  and  materials  furnished  and  for  the 
value  of  the  use  of  such  appliances,  teams  or  power,  whether  at 
the  instance  of  the  owner,  or  of  any  other  person  acting  by  his 
authority  or  under  him,  as  contractor  or  otherwise. 

And  every  contractor,  sub-contractor,  architect,  builder  or 
other  person  having  charge  of  the  construction,  alteration,  addition 
to  or  repair,  either  in  whole  or  in  part,  of  any  building  or  other 
improvement  as  aforesaid,  shall  be  held  to  be  the  agent  of  the  owner 
for  the  purposes  of  the  statute. 

Any  person  who  performs  labor  on  any  mining  claim  or  claims, 
or  in  or  upon  any  real  property  worked  as  a  mine,  either  in  the 
development  thereof  or  in  working  thereon  by  the  subtractive  pro- 
cess, or  furnishes  materials  to  be  used  or  consumed  therein,  has  a 
lien  upon  the  same  and  the  works  owned  and  used  by  the  owners  for 
milling  or  reducing  the  ores  from  the  same,  for  the  value  of  the 
work  or  labor  done,  or  materials  furnished  by  each  respectively, 
whether  done  or  furnished  at  the  instance  of  the  owner  of  such 
mining  claim  or  claims  or  real  property  worked  as  a  mine,  or  his 
agent. 

And  every  contractor,  sub-contractor,  superintendent  or  other 
person  having  charge  of  any  mining  work  or  labor  performed  in  and 
about  such  mining  claim  or  claims  or  real  property  worked  as  a 
mine,  either  as  lessee  or  under  a  working  bond  or  contract  thereon, 

136 


shall  be  held  to  be  the  agent  of  the  owner  for  the  purposes  of  the 
statute. 

The  liens  in  the  statute  provided  for  are  direct  liens, 

And  are  not  in  the  case  of  any  claimants,  other  than  the  con- 
tractor, limited,  as  to  amount,  by  any  contract  price  agreed  upon 
between  the  contractor  and  the  owner,  except  as  provided  in  the 
statute. 

But  said  several  liens  shall  not  in  any  case  exceed  in  amount 
the  reasonable  value  of  the  labor  done  or  material  furnished,  or 
both,  for  which  the  lien  is  claimed,  nor  the  price  agreed  upon  for 
the  same  between  the  claimant  and  the  person  by  whom  he  was 
employed. 

Nor  in  any  case  where  the  claimant  was  employed  by  a  con- 
tractor, or  sub-contractor,  shall  the  lien  extend  to  any  labor  or 
materials  not  embraced  within  or  covered  by  the  original  contract 
between  the  contractor  and  the  owner,  or  any  modification  thereof 
made  by  or  with  the  consent  of  such  owner,  and  of  which  such 
contract,  or  modification  thereof,  the  claimant  shall  have  had  actual 
notice  before  the  performance  of  such  labor  or  the  furnishing  of  such 
materials. 

The  filing  of  such  original  contract,  or  modification  thereof, 
in  the  office  of  the  county  recorder  of  the  county  where  the  property 
is  situated,  before  the  commencement  of  the  work,  shall  be  equiva- 
lent to  the  giving  of  such  actual  notice  by  the  owner  to  all  persons 
performing  work  or  furnishing  materials  thereunder. 

In  case  said  original  contract  shall,  before  the  work  is  com- 
menced, be  so  filed,  together  with  a  bond  of  the  contractor  with 
good  and  sufficient  sureties  in  an  amount  not  less  than  fifty  per  cent 
of  the  contract  price  named  in  said  contract,  which  bond  shall,  in 
addition  to  any  condition  for  the  performance  of  the  contract,  be 
also  conditioned  for  the  payment  in  full  of  the  claims  of  all  persons 
performing  labor  upon  or  furnishing  materials  to  be  used  in  such 
work,  and  shall  also  by  its  terms  be  made  to  inure  to  the  benefit  of 
any  and  all  persons  who  perform  labor  upon  or  furnish  materials 
to  be  used  in  the  work  described  in  said  contract,  so  as  to  give  such 
persons  a  right  of  action  to  recover  upon  said  bond  in  any  suit 
brought  to  foreclose  the  liens  provided  for  in  the  statute,  or  in  a 
separate  suit  brought  on  said  bond,  then  the  Court  must,  where  it 
would  be  equitable  so  to  do,  restrict  the  recovery  under  such  liens 
to  an  aggregate  amount  equal  to  the  amount  found  to  be  due  from 
the  owner  to  the  contractor,  and  render  judgment  against  the 
contractor  and  his  sureties  on  said  bond  for  any  deficiency  or  dif- 
ference there  may  remain  between  said  amount  so  found  to  be  due 
to  the  contractor  and  the  whole  amount  found  to  be  due  to  claim- 
ants for  such  labor  or  materials,  or  both. 

137 


No  change  or  alteration  of  the  work  or  modification  of  any 
such  contract  between  the  owner  and  his  contractor  shall  release  or 
exonerate  any  surety  or  sureties  upon  any  bond  given  under  this 
section. 

It  is  the  intent  and  purpose  of  the  statute  to  limit  the  owners' 
liability,  in  all  cases,  to  the  measure  of  the  contract  price  where  he 
shall  have  filed  or  caused  to  be  filed  in  good  faith  with  his  original 
contract  a  valid  bond  with  good  and  sufficient  sureties  in  the 
amount  and  upon  the  conditions  as  herein  provided. 

It  is  lawful  for  the  owner  to  protect  himself  against  any  failure 
of  the  contractor  to  perform  his  contract  and  make  full  payment  for 
all  work  done  and  materials  furnished  thereunder,  by  exacting  such 
bond  or  other  security  as  he  may  deem  satisfactory.  The  owner 
is  not  obliged  to  rely  upon  the  statutory  bond  for  his  own  protec- 
tion. He  may  require  such  further  security  for  himself  as  he 
sees  fit. 

Any  of  the  persons  above  mentioned  as  entitled  to  liens  except 
the  contractor,  may  at  any  time  give  to  the  owner  a  notice  that  they 
have  performed  labor  or  furnished  materials,  or  both,  to  the  con- 
tractor or  other  person  acting  by  the  authority  of  the  owner,  or  that 
they  have  agreed  to  do  so,  stating  in  general  terms  the  kind  of  labor 
and  materials  and  the  name  of  the  person  to  or  for  whom  the  same 
was  done  or  furnished,  or  both,  and  the  amount  in  value,  as  near  as 
may  be,  of  that  already  done  or  furnished,  or  both,  and  of  the  whole 
agreed  to  be  done  or  furnished,  or  both,  and  any  of  said  persons 
who  shall  on  the  written  demand  of  the  owner  refuse  to  give  such 
notice  shall  thereby  deprive  himself  of  the  right  to  claim  a  lien. 
Such  notice  may  be  given  by  delivering  the  same  to  the  owner 
personally,  or  by  leaving  it  at  his  residence  or  place  of  business  with 
some  person  in  charge,  or  by  delivering  it  to  his  architect,  or  by 
leaving  it  at  the  latter's  ofifice  with  some  person  in  charge.  No  such 
notice  is  invalid  by  reason  of  any  defect  in  form,  provided  it  is 
sufficient  to  inform  the  owner  of  the  substantial  matters  pro- 
vided for. 

Upon  such  notice  being  given  it  is  lawful  for  the  owner  to 
withhold,  and  in  the  case  of  property  which,  for  reasons  of  public 
policy  or  otherwise,  is  not  subject  to  the  liens  in  the  statute  pro- 
vided for,  the  owner  or  person  who  contracted  with  the  contractor 
shall  withhold  from  his  contractor  sufficient  money  due,  or  that  may 
become  due  to  such  contractor,  to  answer  such  claim  and  any  lien 
that  may  be  filed  therefor,  including  the  reasonable  cost  of  any 
litigation  thereunder. 

The  owner  is  not  obliged  to  retain  the  money  claimed  when 
he  is  so  notified,  but  he  is  permitted  to  do  so,  if  he  choose,  and  is 
doubtful  of  the  contractor's  ability  to  pay. 

138 


The  liens  provided  for  in  the  statute  are  preferred  to  any  lien, 
mortgage  or  other  encumbrance  which  may  have  attached  subse- 
quent to  the  time  when  the  building,  improvement,  or  structure 
was  commenced,  work  done,  or  materials  were  commenced  to  be 
furnished;  also  to  any  lien,  mortgage,  or  other  encumbrance  of 
which  the  lien-holder  had  no  notice,  and  which  was  unrecorded  at 
the  time  the  building,  improvement  or  structure  was  commenced, 
work  done,  or  the  materials  were  commenced  to  be  furnished. 

Every  original  contractor,  claiming  the  benefit  of  the  law, 
within  sixty  days  after  the  completion  of  his  contract,  and  every 
person,  save  the  original  contractor,  claiming  the  benefit  of  the  law, 
within  thirty  days  after  he  has  ceased  to  labor  or  has  ceased  to 
furnish  materials,  or  both,  or,  at  his  option,  within  thirty  days  after 
the  completion  of  the  original  contract,  if  any,  under  which  he  was 
employed,  must  file  for  record  with  the  county  recorder  of  the 
county  in  which  such  property  or  some  part  thereof  is  situated  a 
claim  of  lien  containing  a  statement  of  his  demand  after  deducting 
all  just  credits  and  offsets,  with  the  name  of  the  owner  or  reputed 
owner,  if  known,  also  the  name  of  the  person  by  whom  he  was 
employed,  or  to  whom  he  furnished  the  materials,  with  a  statement 
of  the  price,  if  any,  agreed  upon  for  the  same,  and  when  payable, 
and  of  the  work  agreed  to  be  done  and  when  the  same  was  to  be 
done,  if  agreed  upon,  and  also  a  description  of  the  property  to  be 
charged  with  the  lien,  sufficient  for  identification,  which  claim  must 
be  verified  by  the  oath  of  himself  or  of  some  other  person. 

Any  trivial  imperfection  in  the  work,  or  in  the  completion  of 
any  contract  by  any  lien  claimant,  or  in  the  construction  of  any 
building,  improvement  or  structure,  or  of  the  alteration,  addition 
to  or  repair  thereof,  is  not  deemed  such  a  lack  of  completion  as  to 
prevent  the  filing  of  any  lien. 

And,  in  all  cases,  any  of  the  following  is  deemed  equivalent 
to  a  completion  for  all  the  purposes  of  the  statute :  The  occupation 
or  use  of  a  building,  improvement  or  structure  by  the  owner  or  his 
representative ;  or  the  acceptance  by  said  owner,  or  said  agent,  of 
said  building,  improvement  or  structure ;  or  cessation  from  labor  for 
thirty  days  upon  any  (original)  contract  or  upon  any  building, 
improvement  or  structure,  or  the  alteration,  addition  to,  or  repair 
thereof;  the  filing  of  the  (owner's)  notice  provided  for. 

The  owner  may,  within  ten  days  after  completion  of  any  con- 
tract, or  within  forty  days  after  cessation  from  labor  thereon,  file  for 
record  in  the  office  of  the  county  recorder  of  the  county  where  the 
property  is  situated,  a  notice  setting  forth  the  date  when  the  same 
was  completed,  or  on  which  cessation  from  labor  occurred,  together 
with  his  name  and  the  nature  of  his  title,  and  a  description  of  the 

139 


property  sufficient  for  identification,  which  notice  shall  be  verified 
by  himself  or  some  other  person  on  his  behalf.  The  fee  for  record- 
ing the  same  is  one  dollar.  In  case  such  notice  be  not  so  filed,  then 
the  said  owner  and  all  persons  deraigning  title  from  or  claiming  any 
interest  through  him  shall  be  estopped  in  any  proceedings  for  the 
foreclosure  of  any  lien  provided  for  in  the  statute  from  maintaining 
any  defense  therein  based  on  the  ground  that  said  lien  was  not  filed 
within  the  time  fixed  by  the  statute ;  provided,  that  all  claims  of  lien 
must  be  filed  within  ninety  days  after  the  completion  of  any  building 
improvement  or  structure,  or  the  alteration,  addition  or  repair 
thereto. 

In  every  case  in  which  one  claim  is  filed  against  two  or  more 
buildings,  mining  claims,  or  other  improvements  owned  by  the 
same  person,  the  person  filing  such  claim  must  at  the  same  time, 
designate  the  amount  due  to  him  on  each  of  such  buildings,  mining 
claims,  or  other  improvements ;  otherwise  the  lien  of  such  claims  is 
postponed  to  other  liens.  The  lien  of  such  claimant  does  not  extend 
beyond  the  amount  designated,  as  against  other  creditors  having 
liens,  by  judgment,  mortgage,  or  otherwise,  upon  either  of  such 
buildings  or  other  improvements,  or  upon  the  land  upon  which 
the  same  are  situated. 

The  recorder  must  record  the  claim  in  a  book  kept  by  him  for 
that  purpose,  which  record  must  be  indexed,  as  deeds  and  other 
conveyances  are  required  by  law  to  be  indexed,  and  for  which  he 
may  receive  the  same  fees  as  are  allowed  by  law  for  recording  deeds 
and  other  instruments. 

No  lien  provided  for  in  the  Act  binds  any  property  for  a  longer 
period  than  ninety  days  after  the  same  has  been  filed,  unless  pro- 
ceedings be  commenced  in  a  proper  Court  within  that  time  to 
enforce  the  same ;  or,  if  a  credit  be  given,  then  ninety  days  after  the 
expiration  of  such  credit;  but  no  lien  continues  in  force  for  a  longer 
time  than  one  year  from  the  time  the  work  is  completed,  by  any 
agreement  to  give  credit,  and  in  case  such  proceedings  be  not 
prosecuted  to  trial  within  two  years  after  the  commencement 
thereof,  the  Court  may  in  its  discretion  dismiss  the  same  for  want 
of  prosecution,  and  in  all  cases  the  dismissal  of  such  action  (unless 
it  be  expressly  stated  that  the  same  is  without  prejudice),  or  a  judg- 
ment rendered  therein  that  no  lien  exists,  is  equivalent  to  the  can- 
cellation and  removal  from  the  record  of  such  lien. 

Any  person  who,  at  the  request  of  the  reputed  owner  of  any 
lot  in  any  incorporated  city  or  town,  grades,  fills  in,  or  otherwise 
improves  the  same,  or  the  street  or  sidewalk  in  front  of  or  adjoining 
the  same,  or  constructs  any  areas,  or  vaults,  or  cellars,  or  rooms, 
under  said  sidewalks,  or  makes  any   improvements   in   connection 

140 


therewith,  has  a  lien  upon  said  lot  for  his  work  done  and  material 
furnished. 

Every  building  or  other  improvement,  or  work  constructed, 
altered  or  repaired  upon  any  land  with  the  knowledge  of  the  owner 
or  of  any  person  having  or  claiming  any  estate  therein,  and  the 
work  or  labor  done  or  materials  furnished  with  the  knowledge  of 
the  owner  or  persons  having  or  claiming  any  estate  in  the  land,  is 
held  to  have  been  constructed,  performed  or  furnished  at  the 
instance  of  such  owner  or  person  having  or  claiming  any  estate 
therein,  and  such  interest  owned  or  claimed  shall  be  subject  to  any 
lien  filed  in  accordance  with  the  provisions  of  the  Act,  unless  such 
owner  or  person  having  or  claiming  any  estate  therein  shall,  within 
ten  days  after  he  shall  have  obtained  knowledge  of  such  construc- 
tion, alteration  or  repair  or  work  or  labor,  give  notice  that  he  will 
not  be  responsible  for  the  same  by  posting  a  notice  in  writing  to 
that  effect  in  some  conspicuous  place  upon  the  property,  and  shall 
also,  within  the  same  period,  file  for  record  a  verified  copy  of  said 
notice  in  the  office  of  the  county  recorder  of  the  said  county  in 
which  said  property  or  some  part  thereof  is  situated.  Said  notice 
shall  contain  a  description  of  the  property  affected  thereby  suffi- 
cient for  identification,  with  the  name,  and  the  nature  of  the  title 
or  interest  of  the  person  giving  the  same.  Said  copy  so  recorded 
may  be  verified  by  anyone  having  a  knowledge  of  the  facts,  on 
behalf  of  the  owner  or  person  for  whose  protection  the  notice  is 
given. 

Any  contractor  is  entitled  to  recover,  upon  a  lien  filed  by  him, 
only  such  amount  as  may  be  due  to  him  according  to  the  terms  of 
his  contract,  after  deducting  all  claims  of  other  parties  for  work 
done  and  materials  furnished,  as  aforesaid,  and  embraced  within 
his  contract. 

In  all  cases  where  a  lien  shall  be  filed  for  work  done  or  for 
materials  furnished  to  any  contractor,  he  must  defend  any  action 
brought  thereon  at  his  own  expense. 

During  the  pendency  of  such  action  the  owner  may  withhold 
from  the  contractor  the  amount  of  money  for  which  such  lien  is 
filed;  and  in  case  of  judgment  against  the  owner  or  his  property 
upon  the  lien,  the  owner  shall  be  entitled  to  deduct  from  any  amount 
due,  or  to  become  due,  by  him  to  the  contractor,  the  amount  of  such 
judgment  and  costs. 

If  the  amount  of  such  judgment  and  costs  shall  exceed  the 
amount  due  by  him  to  the  contractor,  or  if  the  owner  shall  have 
settled  with  the  contractor  in  full,  he  is  entitled  to  recover  back 
from  the  contractor,  or  his  bondsmen  or  sureties,  on  any  bond  given 
for  the  faithful  performance  of  his  contract,  any  amount  so  paid  by 

141 


him,  the  said  owner,  in  excess  of  the  contract  price,  and  for  which 
the  contractor  was  originally  the  party  liable. 

No  act  done  by  such  owner  in  compliance  with  any  of  the 
provisions  of  the  Act  shall  be  held  to  be  a  prevention  of  the  per- 
formance of  any  such  contract  by  the  contractor,  or  to  have  exoner- 
ated the  sureties  on  such  or  any  bond  given  for  faithful  perform- 
ance, or  for  the  payment  of  liens  of  persons  performing  labor  or 
furnishing  materials,  or  both ;  provided  that  such  act  was  done  in 
good  faith  and  without  design  to  injure  or  harass  any  one. 

Whenever  on  the  sale  of  the  property  subject  to  any  of  the 
liens  provided  for  in  the  law,  under  the  judgment  or  decree  of  fore- 
closure of  such  lien,  there  is  a  deficiency  of  proceeds,  judgment  for 
the  deficiency  may  be  docketed  against  the  party  personally  liable 
therefor  in  like  manner  and  with  like  effect  as  in  action  for  the  fore- 
closure of  mortgages. 

Any  number  of  persons  claiming  liens  may  join  in  the  same 
action,  and  when  separate  actions  are  commenced,  the  Court  may 
consolidate  them.  The  Court  must  also  allow,  as  a  part  of  the  costs, 
the  money  paid  for  verifying  and  recording  the  lien,  such  costs  to 
be  allowed  to  each  claimant  whose  lien  is  established,  whether  he 
be  plaintiff  or  defendant,  or  whether  they  all  join  in  one  action  or 
separate  actions  are  consolidated. 

Whenever  materials  shall  have  been  furnished  for  use  in  the 
construction,  alteration,  or  repair  of  any  building  or  other  improve- 
ment, such  materials  are  not  subject  to  attachment,  execution,  or 
other  legal  process,  to  enforce  any  debt  due  by  the  purchaser  of 
such  materials,  except  a  debt  due  for  the  purchase  money  thereof, 
so  long  as  in  good  faith,  the  same  are  about  to  be  applied  to  the 
construction,  alteration,  or  repair  of  such  building,  mining  claim, 
or  other  improvement. 

Nothing  contained  in  the  law  will  be  construed  to  impair  or 
affect  the  right  of  any  person  to  whom  any  debt  may  be  due  for 
work  done  or  materials  furnished  to  maintain  a  personal  action  to 
recover  said  debt  against  the  person  liable  therefor ;  and  the  person 
bringing  such  personal  action  may  take  out  an  attachment  therefor, 
notwithstanding  his  lien,  and  in  his  affidavit  to  procure  an  attach- 
ment need  not  state  that  his  demand  is  not  secured  by  a  lien ;  but 
the  judgment,  if  any,  obtained  by  the  plaintiff  in  such  personal 
action  shall  not  be  construed  to  impair  or  merge  any  lien  held  by 
said  plaintiff;  provided,  only,  that  any  money  collected  on  said 
judgment  shall  be  credited  on  the  amount  of  such  lien  in  any  action 
brought  to  enforce  the  same. 

It  is  not  competent  for  the  owner  and  contractor,  or  either  of 
them,  by  any  term  of  their  contract,  or  otherwise,  to  waive,  affect, 

142 


or  impair  the  claims  and  liens  of  other  persons,  whether  with  or 
without  notice,  except  by  their  written  consent,  and  any  term  of 
the  contract  to  that  effect  is  null  and  void. 

Any  person  who  wilfully  gives  a  false  notice  of  his  claim  to  the 
owner  forfeits  his  lien.  Any  person  who  shall  wilfully  include  in 
his  claim  work  or  materials  not  performed  upon  or  furnished  for 
the  property  described  in  the  claims  forfeits  his  lien. 

No  mistake  or  errors  in  the  statement  of  the  demand,  or  of  the 
amount  of  credits  and  offsets  allowed,  or  of  the  balance  asserted  to 
be  due  to  claimant,  nor  in  the  description  of  the  property  against 
which  the  claim  is  filed,  invalidates  the  lien,  unless  the  Court  finds 
that  such  mistake  or  error  in  the  statement  of  the  demand,  credits 
and  offsets,  or  of  the  balance  due,  was  made  with  the  intent  to 
defraud,  or  the  Court  shall  find  that  an  innocent  third  party,  without 
notice,  direct  or  constructive,  has,  since  the  claim  was  filed,  become 
the  bona  fide  owner  of  the  property  liened  upon,  and  that  the  notice 
of  claim  was  so  deficient  that  it  did  not  put  the  party  upon  further 
inquiry  in  any  manner. 


143 


X. 

Trusts  and  Agency 

I  treat  of  these  subjects  together,  for  in  many  respects  the  law 
applies  equally  to  each.  A  trustee  has  all  the  powers  of  a  general 
agent  for  the  property  held  by  him  added  to  his  ownership.  An 
agent  many  times  has  as  high  duties  and  responsibilities  as  a 
trustee. 

First,  as  to  trusts.  These  estates  are  of  very  ancient  origin, 
and  it  would  seem  as  if  the  law  touching  them  should  be  fairly  well 
known  to  all,  but  I  doubt  if  there  is  any  estate  in  land  concerning 
which  there  is  more  doubt  and  confusion  in  the  unprofessional  mind. 
The  very  mention  of  the  terms  "trust"  or  "trustee"  in  connection 
with  the  title  to  land  seems  to  cast  a  fog  about  the  title  in  the 
popular  mind. 

The  elementary  notion  of  trusts  was  borrowed  from  the  Roman 
law  and  was  introduced  into  England  under  the  name  of  "uses," 
during  the  reign  of  Edward  III.  They  were  designed  to  evade  the 
law  and  were  resorted  to  at  first  for  mere  purposes  of  fraud.  The 
burdens  of  the  feudal  system  were  great  and  men  would  cover  up 
their  possessions  in  order  to  avoid  them.  It  was  not  long  after  their 
introduction  until  the  greater  part  of  all  the  land  in  England  was 
so  held. 

In  the  beginning  these  conveyances  to  use  were  made  for  the 
benefit  of  a  third  person,  and  when  these  were  established  as  valid 
by  the  Chancellor,  conveyances  to  use  were  made  for  the  benefit  of 
the  original  owner  as  where  A  conveyed  to  B  for  the  use  of  A. 
This  converted  his  legal  estate,  which  was  therefore  subject  to 
feudal  burdens,  into  an  equitable  estate  which  was  not  known  to 
the  common  law.  This  estate  was  upheld  by  the  Chancery  Courts 
and  many  frauds  were  committed  and  great  injustice  done.  Various 
acts  were  passed  from  time  to  time,  including  the  famous  Statute  of 
Uses  passed  in  the  reign  of  Henry  VIII,  and  after  a  bitter  warfare 
between  the  Courts  of  Law  and  the  Chancery  Courts  the  doctrine 
was  finally  settled  that  one  may  deed  to  a  second  person  for  the 
benefit  of  a  third.  That  the  second  person  has  the  legal  title  and 
the  third  person  the  equitable  title.  Through  long  years  of  enact- 
ments and  decisions  the  law  of  trusts  in  land  has  been  fairly  cleared 

144 


and  the  former  evils  done  away  with.  In  this  State  these  trusts  are 
defined  by  statute  and  any  attempted  trust  which  does  not  fall 
within  the  classification  of  the  statute  is  void. 

There  are  classes  of  trusts  which  must  be  distinguished.  An 
express  trust  sometimes  called  a  "specific  trust"  is  created  by  agree- 
ment of  the  parties  expressed  in  the  deed  or  a  declaration  of  trust 
executed  at  the  same  time  as  the  deed.  It  can  be  created  only  for 
certain  purposes  and  within  certain  bounds  as  I  shall  show  later. 
This  express  trust  must  not  be  confused  with  the  trusts  which  the 
law  imposes  under  certain  conditions.  Thus,  one  who  wrongfully 
detains  land  is  an  involuntary  trustee  for  the  benefit  of  the  owner. 
He  has  no  po\vers  whatever  except  to  convey  to  the  owner,  so 
likewise,  one  who  gains  the  land  by  fraud,  accident,  mistake,  undue 
influence,  the  violation  of  an  express  trust  or  other  wrongful  act, 
unless  he  has  some  other  and  better  right  thereto.  A  resulting  trust 
arises  where  one  pays  the  consideration  for  a  purchase  and  the  title 
is  taken  in  the  name  of  another.  Frequently  a  number  of  persons 
will  unite  in  the  purchase  of  land,  taking  the  title  in  the  name  of 
one,  for  convenience.  This  one  is  a  trustee  for  the  others  under  a 
resulting  trust.  He  has  no  powders  except  to  convey  to  his  co-owai- 
ers.  The  trustee  under  a  deed  which  attempts  to  create  an  express 
trust  and  fails  of  the  statutory  requirements,  is  a  trustee  under  a 
resulting  trust,  for  any  person  who  has  paid  a  consideration.  No 
such  trustee  has  any  powers  to  deal  with  the  property  except  to 
convey  to  the  persons  entitled  to  the  land. 

Suffice  it  to  say  that  any  trustee  other  than  one  under  a  valid 
express  or  specific  trust  in  relation  to  real  estate  has  no  powers  as 
such.  Of  course,  one  dealing  with  a  trustee  who  has  no  notice  of 
his  trusteeship,  in  good  faith  and  for  a  valuable  consideration,  is 
protected,  but  w^here  one  has  notice  of  a  trust  of  any  character  he  is 
accordingly  bound,  and  if  he  acquire  title  from  any  other  than  a 
trustee  under  a  valid  express  trust,  he  but  steps  into  the  shoes  of 
his  grantor  and  himself  becomes  such  trustee. 

An  instance  of  notice  to  a  purchaser  may  be  of  value.  A  very 
interesting  case  is  Hassey  vs.  Wilke,  reported  in  55  Cal.,  525,  in 
which  Mrs.  Hassey  brought  suit  to  have  the  defendant  Wilke 
decreed  a  trustee  for  her  in  respect  to  certain  real  property,  and  to 
compel  a  conveyance  of  it  to  her.  On  the  10th  of  August,  1868, 
she  and  F.  A.  Hassey  were  husband  and  wife.  On  that  day  Hassey 
conveyed  to  her  the  property  by  deed  of  gift.  This  made  the  prop- 
erty her  separate  property,  and  the  deed  was  recorded.  Later  F.  A. 
Hassey,  the  husband,  borrowed  of  Nicholas  Luning  $10,000.00, 
executed  his  note,  and  Mrs.  Hassey,  at  the  request  of  the  husband, 
joined  in  a  mortgage  on  the  property  to  secure  it.    This  mortgage 

145 


was  foreclosed,  and  F.  A.  Hassey,  the  husband,  furnished  the  money 
to  one  Burling  to  bid  in  the  property.  A  sheriff's  deed  was  issued 
to  Burling  and  the  next  day  he  conveyed  the  property  to  the  hus- 
band and  this  deed  was  recorded.  Something  like  two  years  after- 
wards, Hassey,  who  was  indebted  to  the  defendant  Wilke,  executed 
to  Wilke  a  deed  for  the  property  for  the  debt.  Wilke  testified  that 
he  had  no  actual  knowledge  of  the  fact  that  the  land  was  the  separ- 
ate property  of  Mrs.  Hassey,  and  that  he  did  not  examine  the  rec- 
ords. The  Court  held  that  in  mortgaging  her  separate  property  to 
secure  the  payment  of  the  husband's  debt  to  Luning,  between  her- 
self and  husband,  she  was  surety  only,  and  that  when  the  husband 
purchased  the  property  through  Burling  at  the  foreclosure  sale,  he 
was  but  paying  his  own  debt,  and  that  he  took  the  title  to  the  prop- 
erty in  trust  for  his  wife,  and  that  Wilke,  who  was  deemed  to  have 
notice  of  these  facts  by  the  record,  simply  stepped  into  his  shoes, 
and  became  a  trustee  under  a  resulting  trust  for  Mrs.  Hassey. 

When  one  takes  title  from  such  a  trustee  with  notice  of  the 
trust,  he  must  see  to  the  application  of  the  proceeds  and  must  know 
that  they  reach  the  one  entitled  thereto,  and  knowledge  of  the  agent 
for  such  a  purchaser  is  notice  to  the  purchaser.  A  purchaser,  how- 
ever, from  the  trustee  under  a  valid  declaration  of  trust,  authorized 
to  sell,  is  not  bound  to  see  to  the  application  of  the  purchase  money, 
and  where  one  buys  from  any  other  trustee  without  any  knowledge 
of  any  existing  equities,  he  takes  the  property  discharged  of  equit- 
able claims,  as  no  implied  or  resulting  trust  can  prejudice  the  rights 
of  purchasers  or  encumbrancers  for  value  and  without  notice  of 
the  trust. 

Any  notice  or  information  received  by  an  intending  purchaser 
or  encumbrancer  that  the  one  with  whom  he  is  dealing  is  not  the 
real  owner  of  the  land  is  sufficient  to  take  him  out  of  the  class  of 
innocent  purchasers,  and  if  he  take  over  the  property  where  he  has 
means  of  acquiring  such  knowledge  on  proper  inquiry  and  fail  to 
make  such  inquiry,  he  takes  the  same  title  as  the  trustee  held  and 
must  account  to  the  real  owner. 

Sharply  distinguished  from  the  class  of  trusts  above  treated  of, 
is  an  express  or  specific  trust  created  by  the  agreement  of  the 
parties,  either  set  forth  in  the  deed,  or  in  a  declaration  of  trust 
executed  by  the  parties  contemporaneously  with  the  execution  of 
the  deed,  and  as  a  part  of  the  same  transaction. 

It  is  of  the  utmost  importance  to  know  what  stipulations  and 
agreements  can  be  made  between  the  parties  in  such  a  trust.  The 
laws  of  California  in  relation  to  trusts  are  rigid  and  many  trusts 
which  would  be  perfectly  lawful  in  other  jurisdictions  are  unlawful 
in  this  State  by  reason  of  the  prohibition  of  the  statute,  or  a  failure 

146 


of  the  statute  to  authorize  them.  The  Courts  of  this  State  have  held 
repeatedly  that  no  express  trust  in  real  estate  is  valid  in  California 
unless  it  be  one  of  the  classes  enumerated  in  the  statute,  and  that 
all  trusts  which  are  not  specifically  authorized  by  the  statute  are 
void  in  their  creation.  Thus  many  lawyers  in  other  jurisdictions, 
not  knowing  of  these  decisions,  are  misled,  thinking  that  the  laws 
of  this  State  are  the  same  as  their  own.  I  may  say  that  I  cannot 
now  recall  one  trust  submitted  to  me  which  was  drawn  in  another 
State,  which  did  not  fall  within  the  prohibitions  of  our  statute,  and 
was  void  in  some  particular.  The  penalty  for  the  avoidance  of  the 
statutes,  or  failure  to  comply  with  them  is  very  severe. 

If  A  make  a  deed  to  B  for  the  benefit  of  C,  and  C  has  paid  no 
consideration  and  the  attempted  trust  to  be  created  is  not  of  a  class 
allowed  by  the  statute,  x\'s  conveyance  is  void  and  B  has  no  title 
for  any  purpose,  but  should  reconvey  to  A  to  clear  the  record. 
If,  however,  in  this  transaction  C  has  paid  a  consideration,  B  holds 
it  as  a  resulting  trustee  for  C  and  must  convey  to  him.  Any  one 
dealing  with  B  with  notice  of  the  trust  must  see  to  it  that  the  trust 
created  is  valid,  otherwise  the  deed  to  him  is  of  no  effect,  and  he 
simply  holds  as  a  resulting  trustee  for  the  one  o\yning  the  land. 

If  one  makes  his  will  and  attempts  therein  to  create  a  trust 
which  is  invalid,  then  as  to  that  property  he  dies  intestate,  and  the 
property  goes  to  his  heirs  at  law  regardless  of  the  will.  In  nearly 
all  jurisdictions,  if  a  trust  be  invalid  by  reason  of  prohibition  of  any 
statute,  or  of  the  common  law,  the  trustee  yet  has  title  to  carry 
out  the  trust  as  nearly  as  may  be ;  at  least  he  is  vested  with  the  title, 
but  in  this  State  under  similar  circumstances  he  is  not,  the  deed  to 
him  being  void. 

An  express  trust  may  be  void  in  the  beginning,  yet  if  the  parties 
proceed  under  it  and  it  be  fully  executed  and  carried  out  in  all 
respects  as  equity  would  demand,  then  it  can  no  longer  be  ques- 
tioned, as  the  parties  will  not  be  allowed  after  they  have  once  dealt 
with  the  property  in  accordance  with  the  trust,  to  say  that  it  was 
invalid.  Likewise  where  an  invalid  trust  is  created  by  a  will,  and 
when  the  estate  is  distributed,  the  Court  construes  the  will  and 
carries  its  provisions  into  its  decree  of  distribution,  and  the  time  has 
passed  for  appeal,  that  decree  governs  and  supersedes  the  provisions 
of  the  will  and  is  safe  from  attack  when  the  land  is  in  the  hands  of  a 
purchaser  for  value. 

A  hard  fought  case  is  what  is  known  as  the  "Fair  Will  Case." 
By  his  will,  Fair  undertook  to  create  a  trust  during  the  lifetime  of 
his  son  Charles,  the  property  on  Charles'  death  to  be  conveyed  by 
the  trustees  to  the  children  of  Charles.  As  the  will  did  not  give  to 
the  children  any  interest  until  the  death  of  Charles,  the  Court  held 

147 


that  the  trustees  could  not  convey  a  title  to  them,  as  under  the 
statutory  provisions  a  trust  to  convey  was  void.  This  statute  has 
since  been  amended  permitting  such  a  trust,  but  it  should  appear 
by  the  deed,  or  will,  that  it  is  the  intention  at  the  time  it  takes 
effect,  to  give  a  present  interest  to  those  who  are  to  finally  receive 
the  estate,  subject  only  to  the  trust. 

Remember  then,  that  no  express  trust  in  real  estate  will  be 
upheld  unless  it  falls  under  the  classes  permitted  by  the  statute. 

Now  as  to  these  classes.  Section  857  C.  C.  declares  that  express 
trusts  may  be  created  for  any  of  the  following  purposes : 

1.  To  sell  real  property  and  apply  or  dispose  of  the  proceeds 
in  accordance  with  the  instrument  creating  the  trust. 

2.  To  mortgage  or  lease  real  property  for  the  benefit  of 
annuitants  or  other  legatees,  or  for  the  purpose  of  satisfying  any 
charge  thereon. 

3.  To  receive  the  rents  and  profits  of  real  property  and  pa}^ 
them  to  or  apply  them  to  the  use  of  any  person  whether  ascertained 
at  the  time  of  the  creation  of  the  trust  or  not,  for  himself  or  for  his 
family  during  the  life  of  such  person,  or  for  any  shorter  term, 
subject  to  the  rules  of  Title  2  of  this  part.    Or 

4.  To  receive  the  rents  and  profits  of  real  property  and  to 
accumulate  the  same  for  purposes  and  within  the  limits  prescribed 
by  the  same  title. 

As  to  the  first  clause.  In  a  trust  to  sell  real  property  it  has 
been  held  that  the  power  must  be  mandatory.  It  cannot  be  left  to 
agreement  whereby  the  powers  of  the  trustee  are  taken  away  from 
him,  as  to  say,  that  the  trustee  shall  sell  with  the  consent  of  the 
beneficiary  or  the  consent  of  any  other  person.  The  trust  need  not 
recite  that  the  property  shall  be  sold  forthwith,  but  it  must  appear 
that  the  property  is  to  be  sold.  It  may  be  expressed  that  the  trustee 
shall  sell  at  such  time  or  on  such  terms  as  he  shall  deem  best,  and  a 
price  at  which  he  shall  sell  may  be  fixed,  yet  the  trust  will  be 
mandatory.  It  should  appear  from  the  trust  agreement  that  the 
trustee  shall  make  sale  in  any  event  in  order  to  make  the  trust 
agreement  valid.  After  the  trust  has  been  lawfully  created  there- 
after the  parties  can  do  as  they  see  fit  in  regard  to  sale  or  in  the 
matter  of  any  agreement  relating  thereto,  but  these  matters  must 
not  appear  in  the  declaration  of  trust,  otherwise  no  title  passes. 

The  instrument  creating  the  trust  must  not  provide  for  a  dis- 
position of  the  proceeds  in  any  manner  in  which  it  would  be  unlaw- 
ful to  devote  the  land.  In  other  words,  if  there  be  a  valid  trust  to 
sell  and  the  declaration  should  recite  that  the  money  should  there- 
after Be  held  perpetually  by  the  trustee,  the  whole  trust  is  void  as 
no  trust  can  be  created  to  exist  longer  than  the  lives  of  those  in 

148 


being  at  the  date  of  the  creation  of  the  trust  and  interested  therein. 
A  trust,  however,  may  be  invalid  as  to  part  and  valid  as  to  the 
remainder,  in  which  case  if  the  trusts  can  be  separated,  if  they  be 
not  so  interwoven  that  should  one  fall,  all  must  fall,  then  the  trust 
will  not  be  held  wholly  void  on  that  account.  The  trust  must  be 
certain  in  its  terms.  A  trust  for  any  period  which  is  not  fixed  upon 
the  life  of  some  one  in  being  at  the  time  of  its  creation  is  void. 
As  for  instance,  if  the  trust  be  created  for  a  term  of  ten  years  with- 
out further  limitation,  it  is  void  on  the  ground  that  there  is  a 
possibility  of  suspension  of  alienation.  All  of  the  parties  interested 
may  be  dead  the  next  hour  after  its  creation. 

A  trust  to  continue  to  a  date  when  a  child  is  to  become  of  age 
is  void  unless  it  be  qualified  with  the  statement  that  he  live  so  long 
and  that  the  trust  shall  terminate  upon  his  death. 

Any  trust  is  void  in  its  creation  which  by  any  possibility  may 
suspend  the  power  of  alienation  beyond  the  lives  of  those  in  being 
at  the  date  of  the  creation  and  interested  in  the  trust. 

The  power  to.  mortgage  or  lease  real  property  is  for  the  benefit 
of  annuitants  or  other  legatees  or  for  the  purpose  of  satisfying  any 
charge  on  the  property.  The  trustee  has  not  the  power  to  lease  for 
a  longer  time  than  the  period  of  his  trust  unless  the  declaration 
permits  it  in  terms,  nor  is  he  permitted  to  mortgage  except  for  the 
purposes  enumerated  in  the  statute.  A  trustee  cannot  mortgage 
the  property  simply  to  furnish  money  to  the  beneficiaries  if  their 
demands  do  not  fall  in  the  above  classification. 

A  trust  to  receive  the  rents  and  profits  of  the  property  is  valid 
as  a  holding  trust  so  long  as  any  of  the  beneficiaries  survive,  but  a 
trust  to  hold  thereafter  for  the  benefit  of  any  issue  not  in  being  at 
the  time  of  the  creation  of  the  trust  is  void  as  to  such  provision. 

The  trustee  must  pay  out  all  of  the  net  income  and  is  not 
permitted  to  accumulate,  except  that  the  income  payable  to  minors 
may  be  accumulated  until  they  reach  legal  age.  None  of  the  above 
provisions  apply  to  charitable  trusts  such  as  foundations  for  schools 
of  learning  or  churches ;  they  may  be  in  perpetuity,  but  no  other 
trust  can  exist  longer  than  the  life  of  the  last  survivor  of  the  persons 
in  being  at  the  time  of  its  creation  and  interested  in  the  trust. 
Xjnder  the  common  law  and  in  all  States  of  the  Union  where  the 
common  law  prevails,  this  term  may  be  continued  twenty-one  years 
after  the  death  of  the  last  survivor. 

When  a  valid  express  trust  has  been  created  the  trustee  is 
vested  with  the  full  legal  and  equitable  title  and  the  beneficiaries 
thereunder  have  no  interest  in  the  land,  but  only  in  the  proceeds 
thereof,  and  this  interest  is  personal  property.  The  land  is  not 
subject  to  judgment  or  attachment  against  any  of  the  beneficiaries. 

149 


Such  a  trust  cannot  be  revoked  by  the  creator  unless  he  reserve 
that  power  in  its  creation. 

A  trust  may  be  always  terminated  by  the  consent  of  all  parties 
interested,  but  this  does  not  mean  that  the  trust  can  be  terminated 
or  altered  after  the  death  of  the  truster,  for  his  consent  can  no 
longer  be  obtained,  and  the  beneficiaries  and  the  trustee  cannot 
simply  because  they  are  dissatisfied  with  the  trust  agree  among 
themselves  that  it  shall  cease  or  be  altered. 

It  has  been  held,  however,  that  in  cases  where  the  purpose  of 
the  trust  has  been  accomplished  and  nothing  remains  to  be  done 
to  carry  out  the  will  of  the  truster  that  the  trust  may  be  terminated 
by  consent  of  all  the  beneficiaries  and  the  consent  of  the  trustee  is 
not  necessary.  He  holds  but  a  dry,  naked  title  which  he  can  be 
compelled  to  convey.  But  this  rule  would  not  apply,  in  cases  where 
it  is  sought  to  alter  or  defeat  the  intention  of  the  truster  after  his 
death. 

A  trust  to  sell  is  not  a  trust  to  exchange.  The  statute  does  not 
in  terms  authorize  an  exchange,  but  where  all  parties  to  the  trust 
agree  upon  an  exchange  and  the  trustee  take  property  in  exchange 
to  be  held  upon  the  same  trusts,  the  transaction  would  undoubtedly 
be  valid,  whether  the  trust  agreement  provided  for  an  exchange  or 
not.  This,  bear  in  mind,  would  require  the  consent  of  all,  otherwise 
one  who  did  not  consent  could  attack  the  transaction  and  show  that 
no  power  is  given  by  the  statute  to  a  trustee  to  exchange.  This 
exact  point  has  not  been  before  our  Courts  and  I  cannot  hazard  a 
guess  as  to  whether  it  would  hold  a  trust  to  exchange  to  be  one 
within  the  statute.  Our  Supreme  Court,  however,  has  held  that  a 
power  to  sell  is  not  a  power  to  exchange. 

The  disposition  of  income  received  by  the  trustee  cannot  be 
left  to  his  discretion  as  in  a  case  where  a  testator  directs  his  trustee 
to  pay  to  a  certain  beneficiary  such  part  of  the  income  of  the 
property  as  the  trustee  shall  deem  best.  The  income  must  all  be 
paid  out,  except  the  income  of  minors  which  may  be  accumulated 
until  they  reach  maturity.  It  must  clearly  appear  that  the  real  estate 
is  to  be  sold  in  any  event  or  a  mandatory  power  of  sale  be  given. 
These  matters  must  not  be  left  to  the  discretion  of  the  trustee. 

Spendthrift  trusts  are  lawful  in  this  State.  That  is  to  say,  the 
truster  may  provide  in  the  trust  that  the  interest  therein  of  any 
beneficiary  shall  not  be  subject  to  assignment  or  advancements, 
or  the  demands  of  any  creditor,  but  this  does  not  apply  to  a  trust 
where  the  truster  of  the  trust  is  the  beneficiary  under  the  trust. 
As  should  A  deed  to  B  and  state  that  thereafter  the  income  of  the 
property  was  to  be  paid  to  A,  and  it  should  be  free  from  all  demands 
of  creditors,  this  would  be  but  an  attempt  to  sequestrate  his  own 

150 


property,  whereas  if  he  make  a  valid  trust  for  the  benefit  of  a  third 
person,  he  can  make  it  upon  sucli  terms  as  he  sees  fit  as  to  the 
use  of  it. 

The  beneficiary  of  a  trust  may  be  the  trustee,  but  this  is  not 
good  practice  ordinarily,  as  Courts  will  very  carefully  scan  the  acts 
of  a  trustee  who  is  acting  in  his  own  behalf.  Where  there  are 
several  trustees,  all  must  act  together,  but  in  case  any  one  or  more 
of  them  is  dead,  the  survivor  or  survivors  may  act  unless  it  is 
otherwise  prescribed  by  the  terms  of  the  trust.  Upon  the  death  or 
inability  of  a  trustee  to  act  or  upon  his  resignation,  the  power  falls 
upon  the  Superior  Court,  and  a  new  trustee  may  be  appointed  upon 
petition.  The  trustee  who  has  accepted  an  express  trust  cannot 
resign  at  his  will,  but  must  continue  unless  there  is  some  good 
reason  for  his  resignation,  but  where  the  trust  is  gratuitous  he  may 
resign  at  any  time. 

The  trustee  is  entitled  to  compensation  depending  upon  the 
circumstances  of  his  trust.  He  cannot  delegate  his  powers,  but  he 
may  employ  others  to  do  purely  ministerial  acts.  Cases  have,  been 
known  where  a  trustee  has  conveyed  over  to  another  person  as 
trustee  all  the  estate  held  by  him,  thus  attemping  to  substitute  a 
new  trustee.  This  deed  is  futile  to  accomplish  the  purpose,  as  no 
trustee  can  delegate  his  powers.  He  has  passed  but  a  bare  legal 
title,  and  a  person  so  sought  to  be  appointed  has  absolutely  no 
power.    A  deed  should  be  taken  back  from  him  to  clear  the  record. 

The  beneficiaries  under  a  trust  take  no  estate  or  interest  in  the 
property  as  I  have  stated,  but  they  may  enforce  the  performance  of 
the  trust.  Note  the  difference  here  between  the  effect  of  a  convey- 
ance to  a  trustee  under  a  valid  express  trust  authorized  by  the 
statute,  and  a  deed  given  to  a  trustee  to  secure  the  payment  of 
money.  In  the  first  instance,  the  trustee  has  the  whole  title  at  all 
times.  In  the  second  instance,  the  trustee  has  such  title  as  is 
necessary  to  the  trust  and  to  protect  it,  and  which  does  not  come 
into  force  and  vigor  until  the  necessity  arises.  He  has  title  at  the 
time  the  hammer  falls  on  foreclosure  sale,  and  can  pass  the  title  to 
the  buyer,  but  up  to  that  time  he  has  no  title  that  he  can  deal  with, 
as  an  owner,  the  real  title  resting  in  his  grantor  or  his  successor. 

Where  an  express  trust  is  in  fact  created,  but  which  does  not 
appear  in  the  deed  to  the  trustee,  or  in  an  instrument  signed  by 
him  and  recorded  in  the  recorder's  office,  such  grant  must  be 
deemed  absolute  in  favor  of  purchasers  from  such  trustee  without 
notice  of  the  trust,  and  for  a  valuable  consideration.  One  who 
actually  and  in  good  faith  transfers  any  money  or  other  property  to 
a  trustee,  as  such,  is  not  bound  to  see  to  the  application  thereof, 
and  his  rights  can  in  no  way  be  prejudiced  by  misapplication  thereof 

151 


by  the  trustee.  Other  persons  must  at  their  peril  see  to  the  proper 
appHcation  of  the  money  or  other  property  delivered  by  them. 
Every  transfer  or  other  act  of  the  trustee  in  contravention  of  the 
trust  is  absolutely  void. 

A  trustee  must  fulfill  the  purposes  of  the  trust  as  declared  at 
its  creation,  and  must  follow^  all  the  directions  of  the  truster  given 
at  that  time,  except  as  modified  by  the  consent  of  all  parties 
interested,  in  the  same  manner  and  to  the  same  extent  as  an  em- 
ploye. A  trustee  whether  he  receive  any  compensation  or  not  must 
use  at  least  ordinary  care  and  diligence  in  the  execution  of  his  trust, 
and  he  must  look  to  it  that  before  he  resign  or  is  discharged  that  a 
trustworthy  successor  be  selected  before  accepting  his  own  final 
discharge.  He  must  invest  money  received  by  him  as  fast  as  he 
collects  a  sufficient  amount  in  such  manner  as  to  afford  reasonable 
security  and  interest  for  the  same,  and  if  he  omits  to  do  this  he 
must  pay  simple  interest  thereon,  if  such  omission  is  negligent 
merely,  and  compound  interest  if  it  is  wilful.  A  trustee  cannot 
enforce  any  claim  against  the  trust  property  which  he  purchases 
after  or  in  contemplation  of  his  appointment  as  trustee,  but  he  may 
be  allowed  by  any  competent  Court  to  charge  to  the  trust  property 
what  he  has  paid  for  the  claim  upon  discharging  the  same.  A  dis- 
cretionary power  conferred  upon  the  trustee  is  presumed  not  to  be 
left  to  his  arbitrary  decision  but  may  be  controlled  by  the  Court  if 
not  reasonably  exercised  unless  an  absolute  discretion  is  clearly 
conferred  by  the  declaration  of  trust. 

A  trustee  cannot  deal  with  a  trust  property  for  his  own  benefit, 
nor  can  he  acquire  any  title  adverse  to  the  trust,  nor  take  any  other 
trust  which  is  hostile  to  the  one  first  held  by  him.  A  trustee  is  also 
held  to  the  highest  good  faith  and  is  responsible  for  the  wrongful 
acts  of  a  co-trustee  to  which  he  consent  or  which  by  his  negligence 
he  enabled  the  latter  to  commit.  If  he  uses  or  disposes  of  the  trust 
property  in  any  manner  not  authorized  by  the  trust,  but  in  good 
faith,  and  with  intent  to  serve  the  interests  of  the  beneficiary  he  is 
liable  to  make  good  only  what  is  lost  to  the  beneficiary  by  his  error. 
If  he  uses  or  disposes  of  the  property  for  his  own  benefit  he  may 
at  the  option  of  the  beneficiary  be  required  to  account  for  all  profits 
so  made  with  interest.  He  may  not  obtain  an  advantage  over  the 
beneficiary  by  the  slightest  misrepresentation,  concealment,  threat 
or  adverse  pressure  of  any  kind,  and  he  must  not  use  influence 
which  his  position  gives  him  to  obtain  any  advantage  from  the 
beneficiary,  and  all  transactions  between  the  trustee  and  his  bene- 
ficiary by  which  he  obtains  any  advantage  from  his  beneficiary  are 
presumed  to  be  entered  into  by  the  latter  without  sufficient  consid- 
eration and  under  undue  influence.     The  trustee  who  wilfully  and 

152 


unnecessarily  mingles  the  trust  property  with  his  own  so  as  to 
make  it  appear  that  he  is  its  absolute  owner  is  liable  for  its  safety 
in  all  events  and  for  the  value  of  its  use. 

Remember  these  things. 

An  express  trust  in  real  estate  is  void  if  it  do  not  fall  under 
the  provisions  of  Section  857  C.  C. 

It  is  void  in  other  than  charitable  trusts  if  the  property  is  to  be 
held  perpetually,  or  the  proceeds  of  any  sale  are  to  be  held  perpet- 
ually, or  for  any  term,  or  to  any  date  which  might  be  beyond  the 
lives  of  those  in  being  at  the  creation  of  the  trust  and  interested 
therein. 

That  a  trust  which  by  any  possibility  suspends  the  power  of 
alienation  beyond  the  lives  of  such  persons  is  void  in  its  creation. 

That  the  power  to  sell  given  the  trustee  must  be  absolute  and 
mandatory  and  not  dependent  upon  the  consent  of  any  other  person. 

Remember  that  a  trust  for  the  accumulation  of  income  except 
for  the  use  of  minors  is  void. 

Remember  that  prior  to  August  10,  1913,  a  trust  to  convey  over 
is  void. 

Remember  that  a  deed  to  a  person  or  persons  as  trustees  for  an 
unincorporated  association  vests  the  title  in  them  individually. 
They  have  no  trust  power.  They  hold  merely  in  trust  for  the  indi- 
viduals who  furnish  the  money.  Upon  the  death  of  one  of  the 
trustees,  his  interest  descends  to  his  heirs. 

A  leading  case  is  Wittfield  vs.  Forster,  124  Cal.,  418.  Here  a 
conveyance  was  made  to  a  trustee  for  an  unincorporated  associa- 
tion, his  successors  and  assigns  forever,  without  further  specifica- 
tion of  the  trust.  In  this  case  no  consideration  was  paid.  The 
Court  held  that  the  trust  was  invalid  not  falling  under  the  Code 
and  void  for  uncertainty,  and  Forster  held  as  a  resulting  trustee  for 
Wittfield,  or  his  heirs,  or  else  had  no  title  at  all.  Had  there  been  a 
consideration  paid,  Forster  would  have  held  for  the  one  paying  the 
consideration,  but  wdth  no  power  except  to  convey  to  the  real  owner. 

Remember  that  a  trustee  cannot  create  a  trusteeship  in  another 
by  conveying  all  the  trust  property  to  him. 

?.  Remember  that  a  trust  cannot  be  terminated  or  amended, only 
by  the  consent  of  all  parties  thereto,  and  if  the  trust  be  a  gratuitous 
one  as  under  a  will  and  the  truster  be  dead,  the  trust  cannot  be 
terminated  or  amended  by  agreement  of  the  trustee  and  the  bene- 
ficiaries unless  its  whole  object  be  accomplished  and  there  is  noth- 
ing further  to  do  in  the  matter. 

i'--  Remember  that  a  trustee's  powers  are  measured  by  the  terms 
of  instrument  creating  the  trust.  A  trustee  has  always  power  to 
do  anything  necessary  to  the  preservation  of  the  trust  estate,  but 

153 


these  implied  powers  in  cases  of  doubt  should  only  be  exercised 
under  direction  of  a  competent  Court. 

The  discussion  on  agency  will  be  confined  to  such  agencies  as 
pertain  to  real  estate.  There  is  a  vast  deal  of  law  governing  the 
subject  and  I  cannot  hope  to  touch  on  more  than  the  salient  features. 
Anyone  capable  of  contracting  may  appoint  an  agent,  and  anyone 
may  be  an  agent.  Where  the  thing  to  be  done  by  an  agent  is 
required  by  law  to  be  an  instrument  in  writing,  the  agent's  authority 
must  be  in  writing,  and  his  powers  are  strictly  measured  by  that 
written  authority. 

This  authority  is  usually  conferred  by  power  of  attorney.  These 
instruments  are  strictly  construed  and  the  attorney  has  no  implied 
powers,  as  has  a  trustee.  He  can  act  only  within  the  scope  of  his 
authority  as  shown  by  the  instrument.  Much  confusion  arises  and 
often  loss  is  suffered  by  inapt  language  or  omissions.  It  is  a  cardinal 
rule  that  such  instruments  should  clearly  express  in  terms  what 
may  be  done  by  the  attorney.  If  he  has  authority  to  convey,  it 
must  so  appear  as  a  power  to  sell  does  not  give  power  to  convey. 

When  the  power  of  attorney  is  special,  it  cannot  be  enlarged  by 
the  general  tqrms.  The  general  terms  are  held  to  apply  only  to  the 
incidents  of  the  special  power.  Thus,  if  the  power  be  to  sell  a 
certain  piece  of  land,  followed  by  the  words  "and  to  make,  do  and 
transact  all  and  every  kind  of  business  of  what  nature  and  kind- 
soever"  and  "giving  and  granting  unto  my  said  attorney  full  power 
and  authority  to  do  and  perform  all  and  every  act  and  thing  neces- 
sary whatsoever  requisite  in  and  about  the  premises,"  these  latter 
clauses  do  not  authorize  a  conveyance  by  the  attorney.  They  are 
held  only  to  apply  to  his  special  power  to  sell.  A  power  to  mortgage 
does  not  imply  a  power  to  execute  a  trust  deed,  for  the  principal 
may  well  give  a  power  to  mortgage,  whereby  he  has  an  equity  of 
redemption  after  a  foreclosure  sale,  and  not  intend  to  authorize  a 
trust  deed  whereby  he  would  lose  that  right.  A  power  of  sale  is 
not  a  power  to  exchange,  for  obvious  reasons.  The  principal  may 
be  satisfied  with  a  cash  sale,  and  yet  not  be  willing  to  trust  to  his 
agent's  judgment  of  property  taken  in  lieu  of  cash.  An  attorney  in 
fact,  or  other  agent,  cannot  deal  with  the  property  for  his  own 
benefit  without  the  consent  of  his  principal  and  any  attempt  to  do 
so  is  presumed  to  be  fraudulent.  The  attorney  in  fact,  cannot  act  in 
any  manner  without  a  full  and  adequate  consideration  moving  to  his 
principal  unless  it  be  otherwise  stipulated  in  the  power.  An  agency 
of  any  character  can  always  be  revoked  by  the  principal,  unless  it  be 
coupled  with  an  interest  held  by  the  agent.  One  can  pay  a  valuable 
consideration  for  an  agency,  or  the  agent  may  have  an  interest  with 
his  principal  in  the  property  which  would  be  affected  to  the  agent's 

154 


detriment  upon  revocation.  In  such  cases  the  principal  cannot 
revoke  it  without  the  consent  of  the  agent,  otherwise  the  agency  is 
revoked  at  the  pleasure  of  the  principal.  Automatically  a  revoca- 
tion is  worked  by  the  death  of  the  principal,  upon  his  being  ad- 
judged incompetent  or  bankrupt.  Likewise  is  the  agency  terminated 
upon  the  agent  being  adjudged  incompetent,  and  if  the  powers  and 
authority  granted  rest  upon  a  personal  confidence  reposed  in  the 
agent,  upon  his  being  adjudged  a  bankrupt.  One  then  dealing  with 
an  agent  who  presents  his  authority  must  examine  the  records  and 
otherwise  make  inquiry  if  the  authority  has  been  revoked,  or  if  >t 
has  been  terminated  by  the  death,  incompetency  or  bankruptcy  of 
the  principal,  or  the  incompetency  or  bankruptcy  of  the  agent.  The 
extent  of  this  inquiry  must  be  governed  by  the  circumstances  of 
the  case. 

An  agent  cannot  delegate  his  powers  to  another  unless  author- 
ized so  to  do  by  his  written  authority.  He  must  deal  in  highest 
good  faith  with  his  principal  and  is  held  to  account  for  everything 
he  receives  for  his  principal's  account.  Thus,  where  the  contract 
is  that  A  shall  have  the  exclusive  right  to  sell  B's  land  for  a  certain 
sum,  any  amount  received  by  A  over  and  above  that  sum  belongs  to 
B,  unless  the  contract  is  to  the  effect  that  A  shall  have  as  his  own 
all  over  and  above  such  sum.  If  you  are  taking  a  contract  to  sell 
property  under  such  circumstances,  and  it  is  the  agreement  that 
you  are  to  receive  all  over  and  above  the  set  sale  price,  see  to  it 
that  it  is  so  set  forth  in  the  contract.  When  an  agent  for  the  sale 
of  land  has  secured  a  purchaser  ready,  able  and  willing  to  purchase, 
or  in  case  he  is  agent  to  procure  a  loan  and  secures  a  person  who  is 
ready,  able  and  willing  to  make  a  loan,  he  has  earned  his  commis- 
sion, and  it  has  been  held  that  he  has  earned  his  commission  when 
he  has  procured  the  consent  of  an  intending  purchaser  or  mort- 
gagee to  an  offer  of  sale,  exchange  or  to  mortgage,  if  the  contract 
provide  in  terms  that  he  shall  be  so  entitled  upon  procuring  the 
mere  consent  of  the  acceptor.  These  are  the  cardinal  rules,  but  the 
cases  in  which  it  is  sought  to  enforce  them  are  legion.  They  always 
hinge  upon  the  facts  and  circumstances  of  the  particular  case,  and 
it  would  serve  no  good  end  to  cite  instances  here. 

An  exclusive  agency,  where  there  is  a  consideration  paid  for  it 
by  the  agent,  entitles  him  to  commissions  even  when  the  land  is 
sold  by  the  principal,  if  the  contract  so  recite,  but  if  it  do  not  so 
recite  he  is  not.  Unless  the  contract  be  given  for  a  consideration 
it  can  be  terminated  at  any  time  by  the  principal,  but  only  when  the 
principal  is  acting  in  good  faith  and  before  the  agent  finds  a  pur- 
chaser, and  it  may  be  revoked  if  the  owner  sell  to  one  who  is  not  a 
purchaser  found  by  the  agent.  Where  the  agent  acquires  an  interest 

155 


in  the  land  along  with  the  agency  supported  by  a  consideration,  the 
agency  cannot  be  revoked  at  the  pleasure  of  the  principal,  but 
where  his  interest  is  only  in  the  proceeds  of  sale  and  not  in  the  land 
itself,  it  may  be. 

If  an  agent  sells  by  an  unrecorded  map  he  cannot  collect  com- 
mission, as  the  act  is  unlawful. 

Now,  as  to  transactions  which  are  popularly  denominated 
"escrows."  It  must  be  borne  in  mind  that  a  legal  escrow  is  created 
by  the  deposit  of  a  grant  by  the  grantor  with  a  third  person,  to  be 
delivered  on  the  performance  of  a  condition  certain.  When  this  is 
done,  the  grantor  has  surrendered  all  dominion  over  the  deed,  and 
he  cannot  withdraw  it.  However,  where  such  a  deposit  is  made 
and  there  yet  remains  something  to  be  agreed  upon  between  the 
parties,  in  short,  if  the  contract  is  not  executed  and  completed,  the 
depositary  holds  as  agent  for  the  grantor,  and  when  the  grantee 
deposits  his  papers  or  money,  the  depositary  is  then  the  agent  for 
the  grantee  as  well.  When  a  deed  is  deposited  in  a  legal  escrow  the 
authority  of  the  depositary  cannot  be  revoked  without  the  consent 
of  both  parties,  but  where  the  instruments  are  deposited  under  such 
circumstances  that  constitute  the  depositary  the  agent,  this  author- 
ity is  revocable.  Bear  in  mind  here  the  sharp  distinction  between 
an  escrow  which  is  an  executed  contract  and  nothing  remains  as  a 
matter  of  agreement,  and  in  a  so-called  "deposit  in  escrow"  where 
the  contract  is  executory  and  there  remains  further  matters  of 
settlement  or  agreement.  In  the  first  case  the  authority  cannot  be 
revoked  by  the  grantor,  and  in  the  second  case  it  can  be. 

The  depositary  being  the  agent  of  both  parties,  the  principals 
of  the  contract  are  bound  by  all  notices  or  matters  coming  to  the 
knowledge  of  the  depositary  which  afifects  their  interest  or  the 
title.  The  depositary  is  held  to  the  highest  good  faith.  He  must 
act  in  an  absolutely  impartial  way,  and  not  attempt  to  act  as  a  judge 
between  the  parties.  While  it  is  true,  that  the  instruments  and 
money  so  deposited  may  be  withdrawn  at  any  time  on  demand  of 
the  one  depositing,  that  is  to  say,  this  is  his  legal  right,  and  he 
could  enforce  it  by  action,  the  depositary  should  not  surrender  the 
instruments  or  money  after  the  conditions  have  been  met  and  the 
parties  have  agreed.    This  as  a  business  policy. 

We  will  take  a  case  where  A  deposits  his  deed  with  B,  with 
instructions  to  deliver  to  C  within  ten  days  on  the  payment  of  the 
money,  and  to  secure  for  him  a  note  and  mortgage  for  the  balance 
of  the  purchase  price.  He  can  withdraw  these  instructions  any 
time  before  B  has  met  the  conditions.  At  any  time  before  the 
transaction  is  completed,  and  a  contract  executed,  either  party  may 
demand  a  return  of  the  documents  or  money,  and  the  depositary 

156 


can  surrender  without  laying  himself  liable.  However,  after  the 
transaction  is  completed  and  everything  is  in  the  depositary's  hands, 
and  the  contract  is  executed,  all  save  the  delivery  of  instruments, 
he  should  not  surrender  either  documents  or  money  without  the 
consent  of  both  parties,  or  in  resportse  to  an  order  of  Court. 

It  is  a  growing  practice  in  this  community  to  conduct  real 
estate  transactions  in  escrow.  It  is  a  highly  commendable  practice, 
one  making  for  the  safety  of  the  parties,  and  should  be  encouraged. 
It  is  not  advisable,  I  think,  to  tell  your  clients  that  when  they 
have  deposited  their  money  or  papers  that  they  have  lost  control 
of  them.  It  appears  to  me  to  be  much  better  to  have  them  know 
the  respective  rights  of  the  parties,  and  for  them  to  know  what  the 
duties  and  responsibilities  of  the  depositary  are. 

Very  frequently  the  parties  disagree  and  fall  apart  in  their 
negotiations,  and  each  demands  of  the  depositary  that  he  do  some- 
thing for  his  benefit,  as  where  having  failed  of  agreement,  the 
grantor  insists  that  the  escrow  holder  shall  retain  the  money  paid 
by  the  grantee  until  further  orders  from  him,  or  the  grantee  demands 
that  the  deed  be  retained  by  the  escrow  holder.  The  duty  of  the 
escrow  holder  is,  if  possible,  to  obey  the  directions  of  both  of  his 
principals,  but  where  he  cannot  do  this,  and  the  demands  are  con- 
flicting he  is  entitled  to  keep  all  papers,  suspend  all  operations 
under  the  escrow,  and  leave  the  parties  to  their  legal  rights. 

In  such  an  escrow  as  this  the  death  of  a  principal  terminates 
the  agency.  I  would  advise  that  in  all  cases  a  valid  executory 
agreement  for  the  sale  and  purchase  of  the  land  be  first  entered  into 
and  this  agreement  deposited  with  the  papers  in  escrow.  The 
depositary  is  a  trustee  for  the  parties,  and  as  I  have  said  must  be 
fair  and  impartial.  Many  circumstances  arise  when  the  depositary 
by  the  exercise  of  good  judgment  can  reconcile  dififerences  between 
the  parties,  and  each  particular  case  must  be  governed  by  its  own 
circumstances.  No  iron  bound  rule  can  be  laid  down  for  the 
handling  of  such  transactions,  bearing  in  mind,  however,  that  this 
one  rule  applies  to  all,  that  the  escrow  holder  is  the  agent  for  both 
parties  and  owes  both  an  equal  duty. 


157 


XL 
Wills  and  Law  of  Succession 

It  must  be  borne  in  mind  that  upon  the  death  of  the  wife  be- 
fore the  husband,  all  the  community  property  is  vested  in  the 
husband  without  administration  of  her  estate.  Hers  is  but  an 
expectancy  during  the  life  of  the  husband  and  dies  with  her.  Up- 
on the  death  of  the  husband,  leaving  a  wife,  one-half  of  the  com- 
munity property  is  vested  in  the  wife,  subject  to  payment  of  the 
debts  of  the  community,  and  the  husband  can  dispose  of  but  one- 
half  of  the  community  by  his  will.  If  he  attempt  to  dispose  of 
all  the  community,  the  widow  may  claim  her  half  or  accept  the 
provision  of  the  will  as  she  may  elect,  but  it  must  plainly  appear 
from  the  language  of  the  will  that  the  testator  intended  to  deal 
with  the  whole  of  the  community  and  not  his  half  of  it  before  she 
is  required  to  elect.  It  has  been  held  that  where  the  testator  de- 
vised "all  my  property"  that  he  intended  to  devise  only  his  half 
of  the  common  property.  If  it  clearly  appear  from  the  language 
of  the  will  that  he  did  intend  to  deal  with  the  whole  of  it  and  the 
provisions  of  the  will  are  inconsistent  with  the  legal  rights  of 
the  wife,  she  is  put  to  an  election.  She  cannot  accept  the  bene- 
fits of  her  succession  and  of  the  will  as  well  if  they  be  inconsist- 
ent. As  I  have  said,  it  must  clearly  appear,  however,  that  it  was 
the  intent  to  put  her  to  an  election  before  she  will  be  held  to  do 
so.  The  will  should  clearly  show  then  that  the  testator  intends 
to  deal  only  with  his  separate  property  and  his  one  half  of  the 
common  property,  if  that  be  the  intent.  If  otherwise,  the  will 
should  so  state  that  the  widow  will  know  of  the  testator's  intent 
and  act  accordingly.  Many  instances  occur  in  the  books  where 
sales  have  been  made  by  the  executor,  either  under  power  in 
the  will,  or  by  order  of  court,  of  the  whole  of  the  property  and 
afterward  the  widow  has  recovered  half  of  it  from  the  purchaser 
or  his  successors.  See  to  it  then  if  you  purchase  land  at  an  ex- 
ecutor's sale  that  he  is  not  attempting  to  sell  the  whole  of  the 
community  without  the  widow's  consent.  The  will  does  not  op- 
erate on  the  homestead  if  it  be  such  as  vests  absolutely  in  the 
survivor.  Every  other  estate  or  interest  in  real  or  personal  es- 
tate to  which   heirs,  husband,  widow  or  next  of  kin  might   suc- 

158 


INIA,  SATURDAY    MORNING.  SEPTEMBER  22  1923 


If 


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i-i 


CALIFORNIA  GASES  AND  COMMENTS 


Indor-    the 


Community  Property  Law:  Rights  of  Husband  and  Wife: 
community  proporiy  law  of  this  state  prior  to  the  adoption  of  172a  of  thf 
Civil  Code  (Stats.  1917)  the  wife  had  an  equal  interest  and  ownership  with  the 
husband  in  community  property  and  the  only  particular  in  which  their  rights 
differed  was  in  the  fact  that  the  statute  constituted  the  husband  the  managing 
and  sales  agent  and  trustee  of  the  community  partne»-shlp  and  authorized  him 
to  sell  and  pass  title  to  such  property  and  exercise  absolute  control  over  the 
}:ame;  provided,  however,^  that  the  husband  could  not  make  a  gift  of  such 
community  property,  or  convey  the  same  without  a  valuable  consideration, 
unless  the  wife,  in  writing,  consented  thereto. 

Real  property  purchased  by  a  husband  after  the  adoption  of  section  172a 
of  the  Civil  Code  in  the  year  1917  (Stats.  1917,  p.  892)  with  community  money 
acquired  before  the  adoption  of  said  section,  is  to  be  regarded  as  having  been 


acquired  before  the  adoption  of  said  section. 


PQJ 

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In  the  case  of  Elizabeth  V.  Roberts  v.  J.  F.  Weymeyer,  66  C.  D.  177,  an 
action  was  in.stituted  by  the  plaintiff  to  have  a  deed  from  William  A.  Roberts 
to  appellant  declared  null  and  void  and  to  have  the  title  to  the  property 
declared  to  be  in  l^r,  on  the  ground  that  a  conveyance  of  community  property 

by  a  husband  is  void  under  section  172a  of  the  Civil  Code  unless  his  wife  joins 

*  "  sc 

in  its  execution.     The  action  was  commenced  on  February  21,  1920,  within  one    jj^. 

year  of  the  date  of  the  recordation  of  the  conveyance  and  also  before  a  final  i  ^''^ 

I  19 
decree  of  divorce  was  granted.     The  finding  is  that  the  land  was  purchased 

with  community  funds  "substantiallj-  all  earned  and  acquired  prior  to  July  26, 

1917,"  and  we  shall  therefore  assume  that  the  funds  were  all  acquired  before 

thM!31si3>ju!j    3!uuBi^'^o-^4,r/?,n/1ered  for  plaintiff,  from  which  defendant  takes 
3ia  Mi'W'   JO  9iT?qojd     (uos.Cjct    j» 

...?f..i."!l"l^.  J«     ^l«lS3-SS0e9-8s!:'f^J>"^?8!P   PU^   ?30BT^ut.T      rupn,. 


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th^qaiUH    H    lUPiiUAV    Jo    9}Ris3— j,.  ^v,,— 

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""J^  -'V  "^^^     ^••I  ^  a  J9I!3MM0oaT    out 
sidui.Uii^a    a    qii9H    JO    a)B,sa-ieHC-92 

Jir.^v    qjiAv    uiiupR  JO   sja^^aq      (JSjoj 
J,  A)     snoajjod:  uiiy  Jo  oir-jr^— g|g^^j. 

P^xauuH  ii'i.w 
VliAv  uriupT!  ;o  sjaj^aq  (jaSaBjj  p  ou 
-JVJ      snoavioj   uuy   jo   a^Hisa-oigig-g^ 

JO    aiBB    JO    uoni^mj.iuoo      (pa^'nlg^a 

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-ui    UB    qoORf    vjos!    JO    ajB:jsq— {.gire— t^  "^^      '   ^*^  J°  a^^JSa—j-gq.g-Lpj 

ssuipaa.ooja  UTjip.iRtvs  jo  jajsuLi  t^b  jjq 


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juajjtio     (D  9  -^a'luiiiM^'K)     sjouiiu  re 
ia   joo.j    -Hii?!    ^-iBlv    JO    ojRis^r— 9'qsf-- 61 
^s!P    [Buij    JOJ    ujaj      (1    :y    a    VIKO) 


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pf    H^oaHJ     K     u«!inr     JO     om^ri-igicc-gl  -^oqs    oj    jap.,o    joi    uia ,      .  ^^"'^ 

>rm,  it??,x^,  ^f'°°'''^P"'l     H     S)         Jou  HX    S^  H    JO    31T;;s3_eoj^o_or 

-!iu   oiui^i   V   aiRlB.v   JO   ajTrjsa— of;.29— ,1  I  assuusia 

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n? 


XL 
Wills  and  Law  of  Succession 

It  must  be  borne  in  mind  that  upon  the  death  of  the  wife  be- 
fore the  husband,  all  the  community  property  is  vested  in  the 
husband  without  administration  of  her  estate.  Hers  is  but  an 
expectancy  during  the  life  of  the  husband  and  dies  with  her.  Up- 
on the  death  of  the  husband,  leaving  a  wife,  one-half  of  the  com- 
munity property  is  vested  in  the  wife,  subject  to  payment  of  the 
debts  of  the  community,  and  the  husband  can  dispose  of  but  one- 
half  of  the  community  by  his  will.  If  he  attempt  to  dispose  of 
all  the  community,  the  widow  may  claim  her  half  or  accept  the 
provision  of  the  will  as  she  may  elect,  but  it  must  plainly  appear 
from  the  language  of  the  will  that  the  testator  intended  to  deal 
with  the  whole  of  the  community  and  not  his  half  of  it  before  she 
is  required  to  elect.  It  has  been  held  that  where  the  testator  de- 
vised "all  my  property"  that  he  intended  to  devise  only  his  half 
of  the  common  property.  If  it  clearly  appear  from  the  language 
of  the  will  that  he  did  intend  to  deal  with  the  whole  of  it  and  the 
provisions  of  the  will  are  inconsistent  with  the  legal  rights  of 
the  wife,  she  is  put  to  an  election.  She  cannot  accept  the  bene- 
fits of  her  succession  and  of  the  will  as  well  if  they  be  inconsist- 
ent. As  I  have  said,  it  must  clearly  appear,  however,  that  it  was 
the  intent  to  put  her  to  an  election  before  she  will  be  held  to  do 
so.  The  will  should  clearly  show  then  that  the  testator  intends 
to  deal  only  with  his  separate  property  and  his  one  half  of  the 
common  property,  if  that  be  the  intent.  If  otherwise,  the  will 
should  so  state  that  the  widow  will  know  of  the  testator's  intent 
and  act  accordingly.  Many  instances  occur  in  the  books  where 
sales  have  been  made  by  the  executor,  either  under  power  in 
the  will,  or  by  order  of  court,  of  the  whole  of  the  property  and 
afterward  the  widow  has  recovered  half  of  it  from  the  purchaser 
or  his  successors.  See  to  it  then  if  you  purchase  land  at  an  ex- 
ecutor's sale  that  he  is  not  attempting  to  sell  the  whole  of  the 
community  without  the  widow's  consent.  The  will  does  not  op- 
erate on  the  homestead  if  it  be  such  as  vests  absolutely  in  the 
survivor.  Every  other  estate  or  interest  in  real  or  personal  es- 
tate to  which   heirs,  husband,  widow  or  next  of  kin  might   suc- 

158 


i 


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\l    if  mna   VaiAia    JO    ojinsa-06SZ9-e    d)   J^qJ^ff  d  39'oaD  JO  aiBjS3-HC6S-92  MfM 

rs  5'ears,  ot  souna  mind  ma}-  dispose  oT  property  by  will.  A  will 
or  part  of  a  will  procured  to  be  made  by  duress,  menace,  fraud, 
or  undue  influence  may  be  denied  probate  and  a  revocation  pro- 
cured by  the  same  means  may  be  declared  v6id. 

A  married  woman  may  dispose  of  all  her  separate  estate  by 
will  without  the  consent  of  her  husband.  Any  person  capable 
by  law  of  taking  property  may  take  under  a  will,  except  that  cor- 
porations other  than  counties,  municipal  corporations,  and  cor- 
porations formed  for  scientific,  literar}^  or  solely  educational  or 
hospital  purposes  cannot  take  under  a  will  unless  expressly  au- 
thorized by  statute. 

No  estate  can  be  bequeathed  or  devised  to  any  charitable,  or 
benevolent  society,  or  corporation,  or  to  any  person  or  persons, 
in  trust  for  charitable  uses,  except  the  same  be  done  by  will  duly 
executed  at  least  30  days  before  the  decease  of  the  testator,  and 
no  such  devises,  or  bequests  shall  collectively  exceed  one-third 
of  the  estate  of  the  testator,  leaving  legal  heirs,  and  in  such  case 
pro  rata  deduction  shall  be  made  to  reduce  the  aggregate  to  one- 
third  of  the  estate,  and  all  disposition  contrary  to  the  statute  is 
void  and  the  property  goes  to  the  residuary  legatee  or  devisee, 
next  of  kin,  or  heirs  according  to  law.  As  these  prohibitions  are 
in  the  interest  of  these  people  they  may  be  waived  and  after  the 
time  for  attacking  the  trust  has  passed,  such  devises  or  bequests 
would  stand. 

Now,  as  to  execution  of  wills.  An  holographic  will  is  one 
that  is  entirely  written,  dated  and  signed  by  the  hand  of  the  tes- 
tator himself.  It  is  not  subject  to  any  other  form  and  may  be 
made  in  or  out  of  this  State,  and  need  not  be  witnessed.  Here  I 
call  attention  to  certain  dangers.  The  statute  must  be  exactly 
met  or  such  a  will  is  void.  Observe  that  it  must  be  entirely  vmt- 
ten,  dated  and  signed  by  the  hand  of  the  testator  himself.  It 
cannot  be  typewritten,  and  if  the  paper  contain  anything  not 
written  by  the  hand  of  the  testator,  such  as  a  date  line  or  letter 
head,  it  is  annulled.  A  recital  in  the  body  of  an  holographic  will 
such  as  '"I,"  "A,"  etc.,  has  been  held  to  be  suflficient  signing,  even 
if  it  be  not  signed  at  the  end,  but  this  does  not  apply  to  other  wills 
which  must  be  signed  at  the  end.  More  litigation  over  estates  has 
arisen,  and  more  property  diverted  contrary  to  the  intent  of  the 
owner  through  the  practice  of  the  testator  drawing  his  own  will 
than  from  any  other  reason.  In  such  a  solemn  and  important  act  one 
should  have  the  best  of  guidance,  for  after  the  testator  be  dead  his 
acts  and  intentions  are  to  be  determined  from  the  cold  words  of  his 
will.   No  court  can  read  language  into  a  will.     The  one  who  spoke 

159 


the  words  cannot  be  heard.  The  law  and  public  policy  permits  per- 
sons to  dispose  of  their  Avorldly  goods  within  certain  limits,  but 
it  must  always  be  remembered  that  it  is  an  indulgence  granted 
by  the  state  and  that  a  dead  man  owns  nothing.  One  should  at 
least  give  a  share  of  the  caution  and  care  in  the  disposal  of  his 
estate  that  he  exercises  in  acquiring  it.  You  will  not  accept  a 
deed  until  you  are  satisfied  it  conveys  a  title  to  you.  If  you  sin- 
cerely desire  it  to  pass  to  your  beneficiaries,  freed  of  entangle- 
ments, common  prudence  should  prompt  you  to  take  the  same 
precautions.  The  books  are  full  of  cases  where  men  have  de- 
feated their  purposes  by  not  knowing  the  elemental  rules  which 
govern  wills.  The  rules  are  simple  enough,  but  they  are  vital. 
Do  not  attempt  to  draw  your  own  will  unless  the  emergency  be 
great.  If  you  do,  see  to  it  you  use  an  absolutely  blank  paper,  and 
see  to  it  that  no  other  hand  than  your  own  is  set  upon  it. 

Instances  are  very  rare  where  nuncupative,  or  unwritten 
wills  are  probated,  yet  they  are  allowed  in  this  State  under  cer- 
tain circumstances.  The  requisites  of  such  a  will  are  that  the 
estate  bequeathed  must  not  exceed  in  value  $1,000.  It  must  be 
proved  by  two  witnesses  who  were  present  at  the  making  there- 
of, one  of  whom  was  asked  by  the  testator  at  the  time  to  bear 
witness  that  such  was  his  will,  or  to  that  effect.  The  decedent 
must  at  the  time  have  been  in  actual  military  service  in  the  field, 
or  doing  duty  on  shipboard  at  sea,  and  in  either  case  in  actual 
contemplation,  fear  or  peril  of  death,  or  the  decedent  must  have 
been  at  the  time  in  expectation  of  immediate  death  from  an  in- 
jury received  the  same  day.  Such  a  will  cannot  be  probated  un- 
less proof  is  offered  within  six  months  of  speaking  the  testamen- 
tary words,  nor  unless  the  words  or  substance  thereof  be  reduced 
to  writing  within  thirty  days  after  they  are  spoken. 

A  will  should  clearly  identify  the  testator.  He  should  state 
whether  he  be  married  or  single,  'what  descendants  he  has,  and 
'  if  the  property  to  be  disposed  of  is  separate  or  community.  While 
these  statements  are  not  conclusive,  they  are  of  great  value  in 
determining  the  intent  of  the  testator,  as  where  he  attempts  to 
dispose  of  the  community  property  as  a  whole.  The  language 
should  be  simple  and  direct  and  such  as  no  man  can  misunder- 
stand. The  will  should  in  terms  revoke  all  former  wills  there- 
tofore made.  The  revocation  of  a  former  will  works  revocation  of 
all  codicils  as  well.  The  last  expression  of  a  testator  is  deemed 
to  be  his  true  intent. 

No  will  made  out  of  this  State  is  valid  as  a  will  in  this  State 
unless  executed  in  accordance  with  the  statutes  of  this  State,  ex- 
cept that  where  a  will  is  executed  by  a  non-resident  in  accord- 

160 


ance  with  the  laws  of  his  place  of  domicile  at  the  time  of  his  death, 
is  valid  in  this  State  so  far  as  the  same  relates  to  personal  property, 
except  as  to  prohibitions  against  devise  for  charitable  and  other 
similar  uses  as  above  outlined. 

Foreign  wills  which  have  been  admitted  to  probate  in  an- 
other jurisdiction  may  be  admitted  to  probate  here  upon  produc- 
tion of  the  record  of  the  original  probate  and  have  the  same  ef- 
fect as  if  probated  here  originally,  but  this  does  not  mean  that  a 
devise  which  would  be  valid  as  to  real  estate  in  the  foreign  coun- 
try would  be  given  effect  here  if  contrary  to  our  statutes. 

Every  will,  other  than  a  nuncupative  will  must  be  in  writing 
and  every  will  other  than  a  holographic  will  and  a  nuncupative 
will  must  be  executed  and  attested  as  follows : — 

1.  It  must  be  subscribed  at  the  end  thereof  by  the  testator 
himself,  or  some  one  in  his  presence  and  by  his  direction  who 
must  subscribe  his  name  thereto. 

2.  The  subscription  must  be  made  in  the  presence  of  the 
attesting  witnesses,  or  be  acknowledged  by  the  testator  to  them  to 
have  been  made  by  him  or  by  his  authority. 

3.  The  testator  must  at  the  time  of  subscribing  or  acknowl- 
edging the  same  declare  to  the  attesting  witnesses  that  the  in- 
strument is  his  will,  and  there  must  be  two  attesting  witnesses 
each  of  whom  must  sign  the  same  as  a  witness  at  the  end  of  the 
will  at  the  testator's  request  and  in  his  presence.  An  attestation 
clause  is  not  essential,  but  it  is  good  practice  to  affix  one  as  it  is 
at  least  prima  facie  evidence  of  the  facts. 

I   suggest  the  following  form  of  attestation  clause : 

"The  above  and  foregoing  instrument  was  on  this 

day  of signed  by  John  Doe  in  our  presence  and  the 

said  John  Doe  at  the  time  of  such  signing,  declared  the  same  in 
our  presence  to  be  his  last  Will  and  Testament,  and  we  at  the  re- 
quest of  said  testator,  and  in  his  presence,  and  in  the  presence 
of  each  other,  have  signed  our  names  as  subscribing  witnesses 
thereto."  Then  follow  with  names  of  witnesses  and  place  or  resi- 
dence of  each. 

A  person  who  writes  the  name  of  the  testator  by  his  direction 
must  sign  as  a  witness  and  should  state  the  fact.  All  beneficial 
devises,  legacies,  and  gifts  whatever  made  or  given  in  any  will 
to  a  subscribing  witness  thereto  are  void,  unless  there  are  two 
other  competent  subscribing  witnesses  to  the  same,  but  a  mere 
claim  of  a  creditor  against  the  estate  does  not  prevent  the  cred- 
itors from  being  competent  witnesses. 

If  a  witness  to  whom  any  beneficial  devise,  legacy  or  gift,  void 
by  the  statute,  is  made  would  have  been  entitled  to  any  share  of 

161 


the  estate  if  the  will  should  not  be  established  he  succeeds  to  so 
much  of  the  share  as  would  be  distributed  to  him,  not  exceeding  the 
devise  or  bequest  made  to  him  in  the  will,  and  he  may  recover  the 
same  of  the  other  devisees  or  legatees  in  proportion  to  and  out  of 
the  parts  devise  or  bequeathed  to  them. 

The  witnesses  to  a  will  should  be  those  persons  who  would 
be  competent  witnesses  in  any  action.  Their  subsequent  death 
or  incompetency  does  not  prevent  the  probate  of  the  will  as  the 
Court  can  always  take  other  testimony.  The  law  throws  about 
the  execution  of  the  will  certain  formalities  to  prevent  frauds. 
If  you  are  called  upon  to  witness  the  execution  of  a  will  see  to  it 
that  you  are  not  a  beneficiary  thereunder.  Sign  it  only  in  the 
presence  of  the  testator,  or  upon  acknowledgment  to  you  of  his 
signature  and  at  his  request  and  after  declaration  by  him  that  it 
is  his  will.     Otherwise  you  will  render  the  execution  void. 

A  prior  will  is  not  revoked  by  a  subsequent  will  unless  the 
latter  contains  an  express  revocation,  or  contains  provisions 
wholly  inconsistent  with  the  terms  of  the  former  will ;  but  in 
other  cases  the  prior  will  remains  effectual  so  far  as  consistent 
with  the  provisions  of  the  subsequent  will,  and  if,  after  making 
a  will,  the  testator  duly  makes  and  executes  a  second  will,  the 
destruction,  cancellation,  or  revocation  of  such  second  will  does 
not  revive  the  first,  unless  the  intent  to  do  so  appears.  If,  after 
having  made  a  will  the  testator  marries,  and  has  issue  of  such 
marriage,  born  either  in  his  lifetime  or  after  his  death,  and  the 
wife  or  issue  survives  him,  the  will  is  revoked,  unless  provision 
has  been  made  for  such  issue  by  some  settlement,  or  unless  such 
issue  be  provided  for  in  the  will,  or  in  such  way  mentioned  there- 
in as  to  show  an  intention  not  to  make  such  provision. 

If,  after  making  the  will  the  testator  marries,  and  his  wife 
survive  him,  the  will  is  revoked,  unless  provision  has  been  made 
for  her  by  marriage  contract,  or  unless  she  is  provided  for  in  the 
will  or  in  such  a  way  mentioned  therein  as  to  show  an  intention 
not  to  make  such  a  provision. 

A  will  made  by  a  woman  is  revoked  by  her  subsequent  mar- 
riage and  is  not  revived  by  the  death  of  her  husband.  A  con- 
tract of  sale  or  a  mortgage  by  the  testator  is  not  a  revocation, 
neither  is  a  deed  before  his  death  whereby  his  interest  is  not 
wholly  divested  before  his  death,  but  if  he  so  express  an  intent 
in  the  instrument,  or  it  be  by  its  terms  inconsistent  with  the  tes- 
tamentary disposition,  it  is  a  revocation.  Whenever  a  testator 
has  a  child  born  after  the  making  of  the  will  either  in  his  life- 
time, or  after  his  death,  and  dies  leaving  such  child  unprovided 
for  by  any  settlement,  and  neither  provided  for  nor  in  any  way 

162 


mentioned  in  his  will  the  child  succeeds  to  the  same  portion  of 
the  estate  that  he  would  have  taken  had  the  ancestor  died  with- 
out making  a  will,  and  where  he  omits  to  provide  in  his  will 
for  any  of  his  children,  or  for  the  issue  of  any  deceased  child, 
unless  it  appears  that  such  omission  was  intentional,  such  child 
or  the  issue  of  such  child  has  the  same  share  in  the  estate  as  if 
the  ancestor  had  died  intestate,  but  in  all  such  cases  the  share 
must  be  taken  from  property  not  disposed  of  by  the  will,  and  if 
that  be  not  sufficient  all  legatees  and  devisees  must  contribute 
ratably.  This  succession  does  not  affect  the  validity  of  any  sale 
made  by  the  executor  under  power  of  sale  in  the  will.  If  such 
children,  or  their  descendants  so  unprovided  for  had  an  equal 
proportion  of  the  testator's  estate  bestowed  upon  them  in  the  tes- 
tator's lifetime  by  way  of  advancement,  they  take  nothing  by 
virtue  of  these  provisions  of  the  statute.  When  any  estate  is  de- 
vised or  bequeathed  to  any  child,  or  other  relation  of  the  testator 
and  he  die  before  the  testator  leaving  lineal  descendants  such  de- 
scendants take  the  estate  as  given  to  the  one  so  dying. 

Except  in  the  cases  above  mentioned,  no  will,  nor  any  part 
thereof,  can  be  revoked  or  altered  otherwise  than :  by  a  written 
w411,  or  other  writing  of  the  testator,  declaring  such  revocation  or 
alteration  and  executed  with  the  same  formalities  with  which  a 
will  is  executed  or  by  being  burned,  torn,  canceled,  obliterated 
or  destroyed  with  the  intent  and  purpose  of  revoking  the  same  by 
the  testator  himself,  or  by  some  one  in  his  presence,  and  by  his 
direction  and  when  this  is  done  by  one  other  than  by  the  testator 
himself  at  his  direction  it  must  be  proved  by  two  witnesses. 

Words  in  a  will  referring  to  death  or  survivorship  simply,  re- 
late to  the  time  of  testator's  death,  unless  possession  is  actually 
postponed  when  they  must  be  referred  to  time  of  possession.  If 
a  devisee,  or  legatee  die  during  the  lifetime  of  the  testator,  the 
disposition  to  him  fails  unless  an  intention  appears  to  substitute 
some  other  in  his  place,  except  when  the  devisee  or  legatee  so 
dying  is  a  child  or  other  relation  of  the  testator,  leaving  lineal 
descendants.     In  such  case  such  descendants  take. 

It  must  be  remembered  that  the  estate  of  a  decedent  is  first 
subjected  to  the  payment  of  his  debts  before  he  is  permitted  to 
bestow  benefactions.  It  therefore  becomes  important  to  know  in 
what  order  the  beneficiaries  stand.  Frequently  it  is  desired  that 
one  shall  have  the  main  benefit  as  to  all  the  estate  not  otherwise 
disposed  of.  When  such  is  the  case,  care  should  be  taken  that 
the  whole  estate,  or  the  main  portion  thereof  is  not  disposed  of 
by  specific  gifts,  legacies,  or  devises,  for  these  take  precedence. 
You  might  subject  the  main  portion  of  the  estate  to  the  payment 

163 


of  the  costs  and  expenses  of  administration  and  the  payment  of 
your  debts,  when  you  did  not  so  intend.  We  will  take  a  single 
case. 

A  desires  by  special  mention  to  bestow  a  gift  on  a  certain 
friend.  He  says  I  give  to  B  $5,000.00,  or  a  certain  piece  of  land. 
All  the  rest  and  residue  of  my  estate  I  give  to  my  son.  Here  he 
has  given  precedence  to  B  over  his  son,  for  the  property  which 
would  be  first  subjected  to  the  costs  and  debts  would  be  that  of 
the  son.  The  beneficiaries  do  not  share  ratably.  The  statute  pre- 
scribes in  what  order  the  debts  shall  be  paid  and  who  pays.  First 
comes  the  expenses  of  administration  and  the  family  allowance  if 
any.  They  take  precedence  over  all  claims.  Next  the  property  of 
the  estate  is  subjected  in  this  order. 

1.  The  property  which  is  expressly  appropriated  by  the 
will  for  the  payment  of  debts. 

2.  Property  not  disposed  of  by  the  will. 

3.  Property  which  is  devised  or  bequeathed  to  a  residuary 
legatee. 

4.  Property  which  is  not  specifically  devised  or  bequeathed 
and, 

5.  All  other  property  ratably. 

The  same  rules  apply  to  legacies.  Legacies  to  husband, 
widow,  or  kindred  are  chargeable  for  debts  and  expenses  only  af- 
ter legacies  to  persons  not  related  to  the  testator.  The  legacies 
to  strangers  must  be  exhausted  before  recourse  be  had  to  those 
of  the  kindred.  Legacies  are  due  and  deliverable  at  the  expira- 
tion of  one  year  after  testator's  decease.  Annuities  commence  at 
testator's  decease.  Legacies  bear  interest  after  one  year  from 
testator's  decease,  except  that  legacies  for  maintenance  or  to  the 
testator's  widow  bear  interest  from  his  death.  One  may  make 
a  gift  of  personal  property  in  view  of  death  and  even  if  the  same 
property  be  otherwise  disposed  of  by  a  will  made  either  before 
or  after  the  gift  is  made,  the  gift  is  not  affected  by  the  will,  unless 
the  gift  be  revoked.  A  verbal  gift  is  not  valid,  unless  the  means 
of  obtaining  possession  and  control  of  the  thing  are  given.  Nor, 
if  it  is  capable  of  delivery  then,  until  it  is  delivered.  A  valid  gift, 
other  than  a  gift  in  view  of  death,  cannot  be  revoked  by  the  giver. 
A  gift  in  view  of  death  is  one  which  is  made  in  contemplation, 
fear  or  peril  of  death,  and  with  intent  that  it  shall  take  efTect  only 
in  case  of  the  death  of  the  giver,  and  a  gift  which  is  made  during 
the  last  illness  of  the  giver  or  under  circumstances  which  would 
naturally  impress  him  with  an  expectation  of  a  speedy  death  is 
presumed  to  be  a  gift  in  view  of  death.  A  gift  in  view  of  death 
may  be  revoked  by  the  giver  at  any  time,  and  is  revoked  by  his 

164 


recovery,  from  the  illness,  or  escape  from  the  peril  under  the  pres- 
ence of  which  it  is  made  or  by  the  occurrence  of  any  event  which 
would  operate  as  a  revocation  of  a  will  made  at  the  same  time, 
but  if  the  gift  has  been  delivered  to  the  donee  then  a  bona  fide 
purchaser  from  him,  the  donee,  before  the  revocation  is  not  af- 
fected by  the  revocation.  This  sort  of  gift  is  treated  as  a  legacy 
where  the  creditors  of  the  giver  are  to  be  satisfied.  The  property 
is  subject  to  their  claims. 

The  right  of  a  purchaser  or  encumbrancer  of  real  property, 
in  good  faith  and  for  value,  derived  from  any  person  claiming  the 
same  by  succession  are  not  impaired  by  any  devise  made  by  the 
decedent  from  whom  succession  is  claimed  unless  within  four 
years  after  the  devisor's  death,  the  instrument  containing  such 
devise  is  duly  proved  as  a  will  and  recorded  in  the  office  of  the 
clerk  of  the  Superior  Court,  having  jurisdiction  thereof,  or  writ- 
ten notice  of  such  devise  is  filed  with  the  clerk  of  the  county 
where  the  real  property  is  situated.  This  has  no  bearing  I  take 
it,  where  an  administration  has  been  had,  and  a  decree  of  distri- 
bution has  been  entered,  and  time  for  appeal  has  passed  all  within 
the  period  of  four  years  after  the  death  of  the  one  from  whom  suc- 
cession is  claimed,  for  these  proceedings  are  final  and  conclusive, 
and  no  subsequently  discovered  will  could  be  probated  after  this 
has  been  done.  But  instances  occur  where  one  purchases  from 
another  who  claims  as  a  successor  from  an  ancestor.  No  probate 
is  had  for  four  years  after  the  death  of  the  ancestor  or  the  probate 
is  not  completed  within  that  period.  No  will  of  the  deceased  is 
effective  against  this  purchaser  from  the  heir,  in  good  faith  and 
for  value,  unless  the  same  be  proved  and  recorded  within  four- 
years  from  the  decedent's  death.  This  means  that  one  who  pur- 
chases from  an  heir  during  administration  takes  subject  to  the 
administration,  and  if  the  administration  be  not  complete  such  a 
purchaser  runs  the  risk  that  a  will  may  be  produced,  depriving 
his  grantor  of  any  interest  within  four  years  of  the  decedent's 
death. 

I  shall  not  go  into  any  of  the  proceedings  leading  up  to 
probate  of  wills  or  the  appointment  of  executors  or  adminis- 
trators. Suffice  it  to  say  that  after  probate  of  a  will  anyone  in 
interest  may  contest  it  and  if  no  contest  be  made  within  one  year 
the  probate  is  conclusive,  except  that  infants  and  persons  of  un- 
sound mind  have  one  year  after  their  disability  be  removed  to  at- 
tack the  will,  but  this  does  not  mean  that  they  can  follow  the 
property  into  the  hands  of  an  innocent  purchaser  for  value.  If 
their  rights  have  been  invaded  by  the  probate  of  the  will  they 
have  the  equitable  right  for  one  year  after  their  disability  is  re- 

165 


moved  to  sue  for  the  land  if  they  find  it  in  the  hands  of  the  orig- 
inal distributees,  or  to  follow  the  proceeds  of  sale,  if  the  property 
has  been  sold  to  innocent  purchasers  for  value. 

All  acts  of  an  ^'dministrator  which  have  been  approved  by 
the  Court,  or  are  in  ordinary  course  of  administration,  are  not 
invalidated  by  the  production  of  a  will  after  his  appointment. 
Thus,  a  purchaser  at  an  administrator's  sale  is  protected,  if  it  be 
subsequently  learned  that  the  deceased  left  a  will.  Where  money, 
is  on  deposit  in  a  bank  not  to  exceed  one  thousand  dollars,  it  may 
be  paid  out  under  certain  conditions,  and  upon  certain  affidavits. 
It  would  serve  no  good  purpose  to  recount  these  matters  here  as 
the  law  is  apt  to  be  changed  at  any  session  of  the  legislature.  One 
can  always .^be  guided  by  the  bank's  requirements.  When  an  ex- 
ecutor named  in  a  will  fails  to  qualify,  or  in  cases  where  no  execu- 
tor is'  named  in  the  will,  an  administrator  with'  the  will  annexed 
will  be  appointed.  By  the  Code  he  is  given  the  same  authority 
over  estates  as  an  executor  would  have,  and  these  acts  are  as  effec- 
tual for  all  purposes.  These  powers,  however,  have  been  con- 
strued by  the  Courts  as  to  extend  only  to  such  cases  where  the 
duties  of  the  executors  are  mandatory  and  do  not  lie  in  discretion 
of  the  executor,  or  to  matters  necessary  to  the  administration, 
such  as  payment  of  debts,  family  allowance,  and  costs  of  admin- 
istration. In  all  other  cases  he  must  file  a  petition  if  it  be  neces- 
sary or  desirable  to  sell  the  real  estate  of  the  deceased  even  if  a 
power  of  sale  be  given  by  the  will  to  the  executor. 

Now,  as  to  succession,  where  the  decedent  die  without  mak- 
ing a  will.  Remember  that  one-half  of  the  community  property 
belongs  to  the  wife  on  the  death  of  the  husband,  but  subject  to 
administration  and  payment  of  the  debts  of  the  community.  Re- 
member that  upon  death  of  the  wife  before  the  death  of  her  hus- 
band the  community  property  vests  in  the  husband  without  ad- 
ministration. Remember  that  where  a  homestead  is  declared  in 
the  lifetime  of  the  deceased  upon  the  community  property  by 
either  spouse,  or  upon  the  separate  property  of  the  spouse  who 
declares  it,  or  consents  to  it,  then  upon  the  death  of  either  spouse 
it  vests  absolutely  in  the  survivor,  and  is  no  part  of  the  estate. 
It  is,  however,  to  be  subjected  to  the  claims  of  creditors,  over 
and  above  the  $5,000  exemption  under  proceedings  outlined  under 
our  paper  on  Homesteads. 

A  child  legally  adopted  is  an  heir.  Every  illegitimate  child 
is  the  heir  of  the  person  who,  in  writing,  in  the  presence  of  a  com- 
petent witness,  acknowledges  himself  to  be  the  father  of  such 
child;  and  in  all  cases  is  the  heir  of  his  mother;  and  inherits  his 
or  her  estate,  in  whole  or  in  part,  as  the  case  may  be,  in  the  same 

166 


manner  as  if  he  had  been  born  in  lawful  wedlock ;  but  he  does  not 
represent  his  father  or  mother  by  inheriting  any  part  of  the  estate 
of  his  or  her  kindred,  unless  before  the  death  of  such  child,  his 
parents  have  intermarried  and  his  father,  aft^r  such  marriage,  ac- 
knowledges him  as  his  child  or  adopts  him  into  his  family,  in 
which  case  such  child  and  all  the  legitimate  children  are  consid- 
ered brothers  and  sisters. 

The  estate  of  one  who  has  been  legitimated  as  above,  and 
who  dies  intestate,  is  succeeded  to  as  if  he  had  been  born  in  law- 
ful wedlock.  If  he  has  not  been  so  legitimated,  and  he  dies  intes- 
tate, his  estate  goes  to  his  issue,  if  he  leave  issue;  if  not,  to  his 
mother,  or  if  she  be  dead,  to  her  heirs. 

There  is  no  distinction  between  children  of  the  half  and  whole 
blood,  unless  the  inheritance  come  to  the  decedent-  by  descent, 
devise,  or  gift  from  some  of  his  ancestors,  in  which  case  a"!!  oi-those 
who  are  not  of  the  blood  of  such  ancestors  are  excluded. 

An}^  advancements  of  any  estate,  real  or  personal,  given  by  the 
decedent  in  his  lifetime  to  any  heir  is  a  part  of  the  estate  of  the 
decedent  for  the  purposes  of  division,  and  must  be  taken  by  such 
heir  as  his  share  of  the  estate.  These  advancements  can  only  be 
enforced  if  the  one  making  them  has  expressed  them  as  such  in 
writing,  or  the  one  receiving  them  has  acknowledged  them  as  such. 
If  they  exceed  the  amount  the  heir  would  be  entitled  to  on  distribu- 
tion the  excess  cannot  be  recovered  from  him,  but  if  they  be  less 
he  is  entitled  to  so  much  more  as  will  give  him  the  full  share  of  the 
estate  and  these  matters  are  true  if  the  heir  die  before  the  ancestor 
as  applied  to  his  representatives. 

This  representation  occurs  when  the  descendants  of  any  de- 
ceased heir  take  the  same  share  or  right  in  the  estate  of  another 
person  that  their  parents  would  have  taken  if  living.  A  child  born 
after  the  death  of  the  father  is  in  this  class.  Resident  aliens  may 
take  in  all  cases  as  civilians,  but  non-resident  aliens  under  a  will, 
or  by  the  laws  of  succession,  must  appear  and  claim  their  inher- 
itance within  five  years  after  the  death  of  the  decedent,  or  his  share 
in  the  estate  is  forfeited  to  the  state.  Bearing  in  mind,  then  that 
either  spouse  may  by  will  dispose  of  his  or  her  separate  property, 
and  the  husband  his  half  of  the  community  property,  as  he  or  she 
sees  fit,  provided  the  will  does  not  contravene  the  rules  above  set 
forth,  we  will  pass  to  the  Law  of  Succession,  which  applies  when 
either  spouse  dies  without  leaving  a  will.  Upon  the  death  of  the 
wife  before  her  husband's  death  there  is  no  succession  of  the  com- 
munity property,  the  law  operating  only  upon  her  separate  property. 
Upon  the  death  of  the  husband  the  law  operates  upon  his  half  of  the 
community,  his  separate  property,  and  the  wife's  half  of  the  com- 

167 


munity  only  so  far  as  it  is  subject  to  the  rights  of  creditors.  This 
half  belongs  to  her  not  by  succession,  but  by  reason  of  her  owner- 
ship, but  it  is  subject  to  debts  of  the  community,  as  indeed  it  is 
when  the  wife  die  before  the  husband.  Upon  death  then  without 
will  the  separate  property  of  either  spouse  and  the  one-half  of  the 
community  belonging  to  the  husband  except  where  limited  by 
marriage  contract,  descends  as  follows : 

1.  If  the  decedent  leaves  a  surviving  husband  or  wife,  and 
only  one  child,  or  the  lawful  issue  of  one  child,  in  equal  shares  to 
the  surviving  husband,  or  wife  and  child,  or  issue  of  such  child. 
If  the  decedent  leaves  a  surviving  husband  or  wife,  and  more  than 
one  child  living,  or  one  child  living  and  the  lawful  issue  of  one  or 
more  deceased  children,  one-third  to  the  surviving  husband  or  wife, 
and  the  remainder  in  equal  shares  to  his  children  and  to  the  lawful 
issue  of  any  deceased  child,  by  right  of  representation ;  but  if  there 
is  no  child  of  decedent  living  at  his  death,  the  remainder  goes  to  all 
of  his  lineal  descendants ;  and  if  all  of  the  descendants  are  in  the 
same  degree  of  kindred  to  the  decedent,  they  share  equally,  other- 
wise they  take  according  to  the  right  of  representation.  If  the 
decendent  leaves  no  surviving  husband  or  wife,  but  leaves  issue,  the 
whole  estate  goes  to  such  issue ;  and  if  such  issue  consists  of  more 
than  one  child  living,  or  one  child  living  and  the  lawful  issue  of  one 
or  more  deceased  children,  then  the  estate  goes  in  equal  shares  to 
the  children  living,  or  to  the  child  living  and  the  issue  of  the 
deceased  child  or  children  by  right  of  representation. 

2.  If  the  decedent  leaves  no  issue,  the  estate  goes  one-half  to 
the  surviving  husband  or  wife,  and  the  other  half  to  the  decedent's 
father  and  mother  in  equal  shares,  and  if  either  is  dead  the  whole  of 
said  half  goes  to  the  other.  If  there  is  no  father  or  mother,  then 
one-half  goes  in  equal  shares  to  the  brothers  and  sisters  of  decedent 
and  to  the  children  or  grandchildren  of  any  deceased  brother  or 
sister  by  right  of  representation.  If  the  decedent  leaves  no  issue, 
nor  husband  nor  wife,  the  estate  must  go  to  his  father  and  mother  in 
equal  shares,  or  if  either  is  dead  then  to  the  other; 

3.  If  there  is  neither  issue,  husband,  wife,  father,  nor  mother 
then  in  equal  shares  to  the  brothers  and  sisters  of  decedent  and  to 
the  children  or  grandchildren  of  any  deceased  brother  or  sister,  by 
right  of  representation ; 

4.  If  the  decedent  leaves  a  surviving  husband  or  wife,  and 
neither  issue,  father,  mother,  brother,  sister,  nor  the  children  or 
grandchildren  of  a  deceased  brother  or  sister,  the  whole  estate  goes 
to  the  surviving  husband  or  wife  ; 

5.  If  the  decedent  leaves  neither  issue,  husband,  wife,  father, 
mother,  brother,  nor  sister,  the  estate  must  go  to  the  next  of  kin,  in 

168 


equal  degree,  except  in  that,  when  there  are  two  or  more  collateral 
kindred,  in  equal  degree,  but  claiming  that  through  different  ances- 
tors, those  who  claim  through  the  nearest  ancestor  must  be  pre- 
ferred to  those  claiming  through  an  ancestor  more  remote ; 

6.  If  the  decedent  leaves  several  children,  or  one  child  and  the 
issue  of  one  or  more  children,  and  any  such  surviving  child  dies 
under  age  and  not  having  been  married,  all  the  estate  that  came  to 
the  deceased  child  by  inheritance  from  such  decedent  descends  in 
equal  shares  to  the  other  children  of  the  same  parent  and  to  the 
issue  of  any  such  other  children  who  are  dead,  by  right  of  repre- 
sentation ; 

7.  If,  at  the  death  of  such  child,  who  dies  under  age,  not  hav- 
ing been  married,  all  the  other  children  of  his  parents  are  also  dead, 
and  any  of  them  has  left  issue,  the  estate  that  came  to  such  child 
by  inheritance  from  his  parent  descends  to  the  issue  of  all  other 
children  of  the  same  parent;  and  if  all  the  issue  are  in  the  same 
degree  of  kindred  to  the  child,  they  share  the  estate  equally,  other- 
wise they  take  according  to  the  right  of  representation ; 

8.  If  the  deceased  is  a  widow,  or  widower,  and  leaves  no  issue, 
and  the  estate,  or  any  portion  thereof,  was  common  property  of 
such  decedent,  and  his  or  her  deceased  spouse,  or  such  spouse  was 
living,  such  property  goes  in  equal  shares  to  the  children  of  such 
deceased  spouse  and  to  the  descendants  of  such  children  by  right  of 
representation,  and  if  none,  then  one-half  of  such  common  property 
goes  to  the  father  and  mother  of  such  decedent  in  equal  shares,  or 
to  the  survivor  of  them  if  either  be  dead,  or  if  both  be  dead,  then 
in  equal  shares  to  the  brothers  and  sisters  of  such  decedent  and  to 
the  descendants  of  any  deceased  brother  or  sister  by  right  of  repre- 
sentation, and  the  other  half  goes  to  the  father  and  mother  of  such 
deceased  spouse  in  equal  shares  or  to  the  survivor  of  them  if  either 
be  dead,  or  if  both  be  dead,  then  in  equal  shares  to  the  brothers 
and  sisters  of  such  deceased  spouse  and  to  the  descendants  of  any 
deceased  brother  or  sister  by  right  of  representation.  If  the  estate, 
or  any  portion  thereof,  was  separate  property  of  such  deceased 
spouse,  while  living,  and  came  to  such  decedent  from  such  spouse 
by  descent,  devise,  or  bequest,  such  property  goes  in  equal  shares  to 
the  children  of  such  spouse  and  to  the  descendants  of  any  deceased 
child  by  right  of  representation,  and  if  none,  then  to  the  father  and 
mother  of  such  spouse,  in  equal  shares,  or  to  the  survivor  of  them 
if  either  be  dead,  or  if  both  be  dead,  then  in  equal  shares  to  the 
brothers  and  sisters  of  such  spouse  and  to  the  descendants  of  any 
deceased  brother  or  sister  by  right  of  representation. 

9.  If  the  decedent  leaves  no  husband,  wife  or  kindred,  and 
there  are  no  heirs  to  take  his  estate  or  any  portion  thereof,  under 

169 


subdivision  eight  of  this  section,  che  same  escheats  to  the  State  for 
the  support  of  the  common  schools. 

It  will  be  observed  that  if  the  decedent  die  leaving  neither 
issue,  husband,  wife,  father,  mother,  brother  nor  sister,  the  estate 
goes  to  the  next  of  kin  in  equal  degree.  The  degree  of  kindred  is 
established  by  the  number  of  generations,  and  each  generation  is 
called  a  degree.  The  series  of  degrees  form  the  line,  and  the  series 
between  persons  who  do  not  descend  from  one  another  but  spring 
from  a  common  ancestor,  as  in  case  of  brothers  and  sisters,  consti- 
tute collateral  kindred.  In  the  collateral  line  the  degrees  are 
counted  by  generations,  from  one  of  the  relations  up  to  the  common 
ancestor,  and  from  the  common  ancestor  to  the  other  relation. 
In  such  computation  the  decedent  is  excluded,  the  relative  included 
and  the  ancestor  counted  but  once.  Thus  brothers  are  related  in 
second  degree,  uncle  and  nephew  in  the  third  degree,  first  cousins 
in  the  fourth  degree,  and  so  on.  In  the  direct  line  there  are  as  many 
degrees  as  there  are  generations.  Now,  where  the  decedent  dies 
leaving  no  husband,  wife,  issue,  father,  mother,  brother  nor  sister, 
the  estate  goes  to  the  collateral  kindred  of  the  same  degree.  Thus 
where  one  die  leaving  Mary,  Richard  and  Lucy,  children  of  a  de- 
ceased brother,  Edward,  a  son  of  a  deceased  brother,  and  James,  a 
grandson  of  a  deceased  brother,  this  grand  nephew  takes  nothing 
and  the  others  take  all  in  equal  shares,  they  being  in  the  third 
degree ;  James  being  in  the  fourth  degree.  Likewise,  those  who 
succeed  take  in  equal  shares,  not  by  right  of  representation,  but  per 
capita.  This  construction  has  lately  been  put  upon  the  section  in 
Estate  of  Nigro  (51  C.  D.  505.) 

Likewise,  under  subdivision  3  of  the  section,  which  is  that  if 
there  is  neither  issue,  husband,  wife,  father  nor  mother,  then  in 
equal  shares  to  the  brothers  and  sisters  of  decedent  and  to  the 
children  or  grandchildren  of  any  deceased  brother  or  sister  by  right 
of  representation.  It  has  been  held  in  Estate  of  Ingram  (78  Cal. 
586)  that  the  children  or  grandchildren  of  a  deceased  brother  or 
sister  cannot  inherit  unless  there  be  a  brother  or  sister  of  decedent 
surviving.  The  Court  says  it  is  vain  to  argue  against  the  injustice 
of  the  rule  as  succession  to  estate  is  purely  a  matter  of  statutory 
regulation. 

Clause  8  of  this  section  is  of  great  interest,  for  it  is  therein 
provided  that  if  the  decedent  be  a  widow  or  widower  and  die  with- 
out issue,  and  if  the  property  of  which  the  decedent  died  seized  was 
the  separate  property  of  a  deceased  spouse,  while  living,  and  came 
from  the  deceased  spouse  by  descent,  devise  or  bequest  the  property 
does  not  go  to  the  heirs  of  the  one  who  died  seized  of  it,  but 
descends  to  the  heirs  of  the  deceased  spouse.    The  one  who  receives 

170 


it  from  the  deceased  spouse  has 'a  full  title  which  he  or  she  can 
convey  or  dispose  of  by  will,  but  not  having  done  either,  and  dies 
without  issue,  the  property  falls  into  the  line  of  descent  from  the 
spouse  whose  separate  property  it  was. 

If  the  estate  be  of  less  net  value  than  $1,500.00,  and  there  be  a 
widow,  or  a  minor  child,  or  minor  children,  the  whole  estate  can  be 
set  apart,  subject  to  the  incumbrances,  to  the  widow  if  there  be  a 
widow.  If  not,  then  to  the  minor  child  or  children.  The  person  to 
whom  it  is  so  set  apart  is  the  owner  free  of  claims  of  general  cred- 
itors. 

Claims  must  be  filed  in  the  estate  or  they  are  forever  barred. 
The  time  for  filing  is  foui  months  from  date  of  first  puljlication  of 
notice  to  creditors,  when  the  estate  is  of  less  value  than  $10,000.00, 
and  ten  months  if  the  estate  exceed  said  sum.  Claims  which  are  not 
due  should  be  presented  as  contingent  claims,  else  the  heirs  will 
not  be  bound  after  the  estate  is  settled.  Mortgages  on  the  home- 
stead must  be  presented  or  the  right  of  foreclosure  is  lost.  Mort- 
gages on  other  lands  need  not  be  presented  if  the  mortgagee  waive 
the  right  to  a  deficiency  judgment. 

Since  1893  all  the  estates  of  deceased  persons  have  been  sub- 
ject to  an  inheritance  tax.  The  Act  of  March  23rd,  1893,  did  not 
tax  direct  heirs.  This  Act  remained  in  force  until  1905.  The  law 
was  again  revised  in  1911  and  1913  and  again  in  1915.  The  law  in 
force  at  the  death  of  the  decedent  determines  the  rate  of  tax  charge- 
able against  any  inheritance.  Since  inheritance  taxes  due  are  often 
not  paid  until  some  years  following  the  death  of  the  decedent,  it  is 
important  to  ascertain  what  interests  are  taxable  and  what  the 
rates  of  exemptions  are  after  any  time  since  the  passage  of  the  first 
Act.  These  rates  and  exemptions  are  too  voluminous  to  include 
here.     Reference  must  be  made  to  the  Acts  themselves. 

The  present  Act  defines  "estate  and  property"  to  mean  real  and 
personal  property  or  interest  therein  of  the  testator,  grantor,  bar- 
gainor, vendor  or  donor  passing  or  transferred  to  individual  leg- 
atees, devisees,  heirs,  next  of  kin,  grantees,  donees,  vendees  or  suc- 
cessors, and  shall  include  all  personal  property  within  or  without 
the  State.  The  word  "transfer"  as  used  in  the  Act  shall  be  taken  to 
include  the  passing  of  property  or  any  interest  therein,  present  or 
future,  by  inheritance,  devise,  succession,  bequest,  grant  deed,  bar- 
gain, sale  or  gift.  At  present  as  the  law  stands,  a  tax  is  imposed 
upon  the  property  when  it  vests  in  the  survivor  of  a  joint  tenancy 
or  the  succession  after  the  death  of  a  life  tenant,  or  the  vesting  of  a 
homestead  in  the  survivor. 

Upon  the  death  of  the  decedent,  all  his  property  vests  immedi- 
ately in  his  heirs  if  he  die  without  making  a  will,  and  in  his  devisees 

171 


if  he  make  a  will.  A  devise  may  be  made  of  the  property  to  a 
trustee  which  will  vest  all  the  title  in  the  trustee  upon  the  death  of 
the  testator,  but  in  all  cases  these  ownerships  are  subject  to  the 
administration  of  the  estate.  Therefore,  when  one  deals  with  an 
heir  or  a  devisee  before  the  estate  be  closed  and  distributed  either 
by  purchase  or  by  making  a  loan,  he  runs  the  risk  of  losing  the 
property  or  security,  as  it  cm  always  be  taken  to  satisfy  creditors. 

A  devise  may  be  made  to  a  trustee  of  the  full  title  with  power 
of  sale,  without  order  of  Court  or  without  confirmation  of  Court, 
but  where  the  mere  power  of  sale  in  the  will  is  given  to  an  executor, 
the  sale  can  be  made  without  order  of  Court  therefor,  but  it  must  be 
confirmed  by  the  Court.  It  is  the  safer  and  better  practice  where  an 
administrator  with  will  annexed  is  making  the  sale,  to  first  secure 
an  order  of  Court  for  sale,  even  if  the  will  gives  a  power  of  sale,  for 
he  can  sell  only  for  administrative  purposes  and  the  necessity  of 
such  a  sale  is  always  a  matter  of  proof. 

No  administrator  or  executor,  unless  he  is  given  the  power  in 
the  will,  can  deed  or  mortgage  the  property  of  the  estate  without 
an  order  of  Court,  and  the  instruments  must  show  his  authority. 
Any  sales  made  by  order  of  Court  by  an  administrator  are  under 
proceedings  fixed  by  the  statute,  and  these  statutes  must  be  strictly 
followed.  It  is  incumbent  upon  a  purchaser  at  an  administrator's 
or  executor's  sale  to  see  that  all  the  steps  leading  up  to  the  sale  have 
been  properly  taken,  as  the  purchaser  buys  at  his  peril.  He  must 
see  to  it  that,  if  the  community  interest  of  the  wife  is  being  sold 
that  it  is  with  her  consent,  or  that  it  is  necessar}^  to  the  payment  of 
costs  of  administration  and  debts  of  the  community.  If  it  be 
found  that  the  sale  is  being  made  of  her  interest,  require  from  her  a 
deed.    These  same  cautions  apply  where  the  property  is  homestead. 

Remember  these  points. 

Any  person  over  the  age  of  21  years  may  be  an  executor. 
It  is  not  required  that  executors  be  residents  of  this  State.  No 
non-resident,  however,  can  be  appointed  administrator  of  an  estate. 

If  there  are  two  or  more  executors  acting,  each  is  liable  for  the 
acts  of  the  other. 

Remember  that  an  administrator  cannot  make  a  deed  or  mort- 
gage of  the  property  of  an  estate  without  order  of  Court. 

Remember  that  the  deed  made  by  an  heir  or  devisee  before  the 
estate  is  distributed  may  be  defeated  by  an  administrator  or  ex- 
ecutor's sale  to  pay  debts  or  legacies. 

Remember  that  the  husband  cannot  dispose  of  his  wife's  com- 
munity interest  in  the  property  by  will,  nor  deprive  her  of  the 
homestead. 

Remember  that  in  trusts  created  in  wills  other  than  charitable 

172 


trusts  that  they  cannot  be  for  a  longer  period  than  the  life  of  the 
survivor  of  those  in  being  at  the  time  of  the  death  of  the  decedent 
and  interested  in  the  trust,  and  that  no  accumulations  of  income  are 
permitted  except  for  the  benefit  of  minors. 

And  do  not,  and  this  is  a  final  word,  become  the  "Best  Friend 
r^+  thf^  T  nwvpr  "  "the  man  who  draws  his  own  will." 


ADDENDA 

( )n  May  23,  1916,  after  this  work  had  gone  to  press,  the  District 
Court  of  Appeals  held  in  the  case  of  Crowley  vs.  Savings  Union 
Bank  and  Trust  Company  (22  App.  921 )  that  in  cases  where  a  note 
and  mortgage  runs  to  husband  and  wife,  that  each  takes  a  half 
thereof  by  season  of  the  provisions  of  Section  164  C.  C.  to  the  effect 
that  whenever  property  is  conveyed  to  a  married  woman  and  to  her 
husliand.  the  presumption  is  that  wife  takes  as  tenant  in  common. 
In  cases  where  the  note  and  mortgage  runs  to  a  married  woman 
and  another,  or  to  husband  and  wife,  )^ou  should  require  a  release 
from  both  mortgagees  and  you  should  pay  the  proceeds  one-half 
to  each. 

This  rule  does  not  apply  in  cases  where  the  note  and  mortgage 
express  in  terms  that  same  are  held  as  joint  tenants  with  the  right 
of  survivorship. 


173 


if  he  make  a  will.  A  devise  may  be  made  of  the  property  to  a 
trustee  which  will  vest  all  the  title  in  the  trustee  upon  the  death  of 
the  testator,  but  in  all  cases  these  ownerships  are  subject  to  the 
administration  of  the  estate.  Therefore,  when  one  deals  with  an 
heir  or  a  devisee  before  the  estate  be  closed  and  distributed  either 
by  purchase  or  by  making  a  loan,  he  runs  the  risk  of  losing  the 
property  or  security,  as  it  cin  always  be  taken  to  satisfy  creditors. 

A  devise  may  be  made  to  a  trustee  of  the  full  title  with  power 
of  sale,  without  order  of  Court  or  without  confirmation  of  Court, 
but  where  the  mere  power  of  sale  in  the  will  is  given  to  an  executor, 
the  sale  can  be  made  without  order  of  Court  therefor,  but  it  must  be 
confirmed  by  the  Court.  It  is  the  safer  and  better  practice  where  an 
administrator  with  will  annexed  is  making  the  sale,  to  first  secure 
an  order  of  Court  for  sale,  even  if  the  will  gives  a  power  of  sale,  for 
he  can  sell  only  for  administrative  purposes  and  the  necessity  of 
such  a  sale  is  always  a  matter  of  proof. 

No  administrator  or  executor,  unless  he  is  given  the  power  in 
the  will,  can  deed  or  mortgage  the  property  of  the  estate  without 
an  order  of  Court,  and  the  instruments  must  show  his  authority. 
Any  sales  made  by  order  of  Court  by  an  administrator  are  under 
proceedings  fixed  by  the  statute,  and  these  statutes  must  be  strictly 
followed.  It  is  incumbent  upon  a  purchaser  at  an  administrator's 
or  executor's  sale  to  see  that  all  the  steps  leading  up  to  the  sale  have 
been  properly  taken,  as  the  purchaser  buys  at  his  peril.  He  must 
see  to  it  that,  if  the  community  interest  of  the  wife  is  being  sold 
that  it  is  with  her  consent,  or  that  it  is  necessary  to  the  payment  of 
costs  of  administration  and  debts  of  the  community.  If  it  be 
found  that  the  sale  is  being  made  of  her  interest,  require  from  her  a 
deed.    These  same  cautions  apply  where  the  property  is  homestead. 

Remember  these  points. 

Any  person  over  the  age  of  21  years  may  be  an  executor. 
It  is  not  required  that  executors  be  residents  of  this  State.  No 
non-resident,  however,  can  be  appointed  administrator  of  an  estate. 

If  there  are  two  or  more  executors  acting,  each  is  liable  for  the 
acts  of  the  other. 

Remember  that  an  administrator  cannot  make  a  deed  or  mort- 
gage of  the  property  of  an  estate  without  order  of  Court. 

Remember  that  the  deed  made  by  an  heir  or  devisee  before  the 
estate  is  distributed  may  be  defeated  by  an  administrator  or  ex- 
ecutor's sale  to  pay  debts  or  legacies. 

Remember  that  the  husband  cannot  dispose  of  his  wife's  com- 
munity interest  in  the  property  by  will,  nor  deprive  her  of  the 
homestead. 

Remember  that  in  trusts  created  in  wills  other  than  charitable 

172 


ADDENDA 

On  May  23,  V)\().  after  this  work  had  gone  to  press,  the  Distriet 
Court  of  Appeals  held  in  the  case  of  Crowley  vs.  Savings  Union 
IJank  and  Trust  Company  (22  App.  921)  that  in  cases  where  a  note 
and  mortgage  runs  to  husl^and  and  wife,  that  each  takes  a  half 
thereof  bv  Keason  of  the  provisions  of  Section  164  C.  C.  to  the  effect 
that  whene^■er  property  is  conveyed  to  a  married  woman  and  to  her 
husband,  the  presumption  is  that  wife  takes  as  tenant  in  common. 
In  cases  where  the  note  and  mortgage  runs  to  a  married  woman 
and  another,  or  to  husband  and  wife,  you  should  require  a  release 
from  both  mortgagees  and  you  should  pay  the  proceeds  one-half 
to  each. 

This  rule  does  not  apply  in  cases  where  the  note  and  mortgage 
express  in  terms  that  same  are  held  as  joint  tenants  with  the  right 
of  survivorshi]>. 


trusts  that  they  cannot  be  for  a  longer  period  than  the  life  of  the 
survivor  of  those  in  being  at  the  time  of  the  death  of  the  decedent 
and  interested  in  the  trust,  and  that  no  accumulations  of  income  are 
permitted  except  for  the  benefit  of  minors. 

And  do  not,  and  this  is  a  final  word,  become  the  "Best  Friend 
of  the  Lawyer,"  "the  man  who  draws  his  own  will." 


173 


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(  '/iZ-'C-^C^  -        C-z?-z--t-n_-oi.<,<io**c,-^^ 


The  State  of  ^exas 
County  of  Galveston 

1,  Ghaunoy  B,  Sabin  of  Galveston,  Texas, 
being  of  sound  and  disposinp-  memorj^   "but  In  feeble 
health  do  hereby  made  this  my  last  V7ill  c-nd  testa- 
ment, hereby  revoking  all  previous  wills  and  hold- 
ing the  same  for  naught, 

1  hereby  desire  that  upon  my  death  all 
my  funeral  expenses,  expenses  of  last  sickness,  be 
first  paid  and  discharged  within   such  reasonable 
time  as  may  be  just  an  d  without  embarrassing  my 
estate  to  an  improper  de,?rrei,S^. 

£nd:   It  is  ny  will  that  all  other  debts 
'  discharged,  the  right  of  my  wife 
and  son  to  a  homestead  anc  other  property  executed 
by  law,  and  the  years  support  to  be  first  duly  con- 
sidered anc  protected. 

3rd:  My  estate  is  entirely  community 
property,  real  and  personal,  my  v;ife  having  a  sep- 
arate property  in  Harris,  conveyed  to  her  by  her 
brother  Wm.  P.  Eamblen  by  deed  many  years  ago  in 
discharge  of  a  trust  grov/ing  out  of  separate  funds 
belon^in?'  to  her,  placed  in  hi?-:  hands  for  invest- 
m.ent  • 

This  property  i  make  no  dispositioi:  of 
:;Mt  leave  to  her  as  her  ot.tl  individual  property 
which  1  cannot  dispose  of. 

The  residue  of  all  property  i?  community 
property  to  v;hich  she  is  entitled  to"  ■§-  of  the  pro- 
ceeds ther'?of ,  after  the  pa;^Tr.ent  of  debts,  the  ofher 
^   is  subject  to  my  disposition  by  will  or  otherwise 
and  i  hereby  will  and  bequeath  my  \   of  such  commun- 
ity property  'o  my  son  Lorenzo  Sherwood  Sabin  of 
Galveston,  Texas,  /said  ■  roperty  is  situated  in  i^ills. 
Hood,  'tarris  and  Galveston  Cos.,  Texss,  so  th^t  on 
my  death  all  of  the  said  community  property  of  my- 
;elf  anc  v.ife  ivj^ry  A,  Sabin  will  immediately  vest 

nd  be  subject  to  their  dis- 

paym-ent  of  debts,  it  is 
my  vrlll  tliat  4o  action  be  had  in  the  County  Gourj? 
upon  my  estat^  further  than  the  probate   f  this 

-1- 


in  her  and  my  s''^d  son  a 
position,  subjecx  t:  the 


